TPV banks on flat-panel growth

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TPV Technology, which is to buy the personal computer monitor business of Philips of the Netherlands, expects sales of Philips-branded PC monitors and flat-screen televisions to grow 80 per cent a year on average until 2009.

Hong Kong-listed TPV said the maximum value of Philips-branded products it would be permitted to manufacture for the Dutch company under a supply contract would grow from US$556m this year to US$5.82bn in 2009.

Shane Tyau, TPV's director of corporate finance, said that, while the figures did not represent a sales forecast, he expected the growth rate to accurately reflect the business's future expansion.

Taipei-based TPV announced in December it planned to acquire Philips' computer monitor and entry-level flat-screen TV units for US$358m. Philips will receive half of the payment in new TPV shares, equal to 15 per cent of the Taipei company's enlarged market value, and half in convertible bonds.

Branded sales in 2004 accounted for about 58 per cent of the Philips business, which reported losses of US$40.6m last year because of falling prices of LCD products and low gross margins.

But TPV, which supplies manufacturers such as Dell and Hewlett-Packard, said last week that in the first quarter of this year “the long slide in panel prices that has sapped the industry appeared to subside”.

Herman Woo, analyst at Macquarie Research in Hong Kong, expected the Philips operation to become profitable in 2006.

Don See, at DBS Vickers in Singapore, said the transaction would help TPV to grow faster than its competitors thanks to economies of scale. “This industry growth is set to consolidate and therefore scale is king,” he said.

TPV on Thursday said the Philips business would lift its global PC monitor market share from 19.2 per cent to almost one-third.

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