Chi Mei Optoelectronics, Taiwan’s second-largest liquid crystal display manufacturer, on Thursday said that a strong upswing in demand for flat-screen television panels was under way.
The comments confirm signs that the industry is bouncing back after a weak second quarter. “We can say for sure that business is clearly and strongly recovering,” Ho Chao-yang, CMO president, said.
In the three months to October, shipments would rise at least 20 per cent quarter-on-quarter, he said, giving a more bullish outlook than any other LCD maker. He predicted a slight increase in prices for television panels, which had seen an almost 30 per cent drop in the second quarter.
CMO said demand was especially strong in the US, which had already performed well in the otherwise-weak second quarter. Demand for TV panels between 40 and 50 inches in size soared by at least 50 per cent in the second quarter and was expected to continue to grow by at least 30 per cent per quarter over the next year, the company said. CMO makes panels for the US brand Westinghouse.
In response to this trend, CMO said it would expand production of panels larger than 40 inches size.
The bullish guidance follows a 23 per cent sequential drop in sales and a swing to a T$944m loss in the second quarter as inventories soared due to disappointing TV panel demand in Europe.
CMO said the current upswing was strong enough to digest excess inventory by the end of the year. However, Mr Ho announced a series of strategic adjustments to better cope with the strongly cyclical flat-screen television market and to capture more attractive segments of the market.
Echoing comments from other large industry players, Mr Ho said CMO would reduce capacity loading during weak seasons in the future to avoid the repeated accumulation of excess inventory. In addition, the company would seek to win more top-tier brands as its customers.