Panasonic has announced that it will be reducing its capital investment toward PDP (plasma display panel) and LCD TV plants through 2012 by JPY135 billion (about US$1.5 billion) to JPY445 billion from an initial plan of JPY580 billion. Panasonic has both PDP and LCD module plants. The CAPEX cut will be focused squarely on the company’s fifth PDP plant that is currently under construction at Amagasaki, Hyogo Prefecture, Japan. Panasonic originally had planned to invest JPY280 billion in the plant but has decided to decrease it by JPY70 billion to just JPY210 billion.
Panasonic will also reduce investments at its affiliate IPS Alpha, which is a LCD manufacturing company where Panasonic has significant share. IPS Alpha’s latest LCD fab will be built in Himeji, Hyogo Prefecture. Panasonic originally planned JPY300 billion for the LCD fab but has reduced it by JPY65 billion to just JPY235 billion.
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According to a Bloomberg article, Sharp‘s CEO Katsuhiko Machida mentioned that LCD panel prices may stop falling in March, “The price will hit the bottom when inventories are gone, and we estimate that will happen by the end of this March.” LCD manufacturers have been experiencing extreme stress in the second half of 2008 where inventory was building and demand for LCD products were collapsing.
LCD suppliers throttled down LCD fab utilization rates to historical lows to prevent continued build-up of inventory in the channel. LCD panel prices had decreased to below cash cost and some suppliers even refused to sell any LCD panels at below cash cost due to heavy lossses. Sharp also announced in December that two LCD panel production lines at two plants located in western Japan would be closed to maintain profitability.
“At their worst last year, LCD panel inventories rose to 14 million. Since most LCD makers started postponing new investments last fall, supplies are decreasing rapidly,” according to Machida. Sharp reduced its net income foreast by 43% to JPY60 billion (about US$669 million) for the year ending March 31.
Source: Bloomberg
[tags]Sharp, Katsuhiko Machida, LCD Manufacturer, Display Manufacturer[/tags]
DisplayPort is getting a lot of attention lately, thanks mostly to Apple though Dell has been pushing DisplayPort for a long time. VESA will be adding Apple’s Mini DisplayPort and stereoscopic 3D into the DisplayPort 1.2 specifications, which will be finalized and published in mid-2009. Stereoscopic 3D requires quite a bit more bandwidth so that will increase to 5.4Gbps. With increased bandwidth comes a ton more pixel pushing capability: four 1920 x 1200 displays, one 3840 x 2160 display or one 1920 x 1080 (I’m assuming 1920 x 1200 will work too) stereoscopic 3D display.
Source: Register Hardware via Mac Rumors via Engadget
[tags]DisplayPort, VESA, Mini DisplayPort, Stereoscopic 3D, DisplayPort 1.2, 1920 x 1200, 3480 x 2160[/tags]
AU Optronics (AUO) is the largest LCD manufacturer in Taiwan and one of the largest in the world but even the largest cannot go unaffected by a global decline in demand for LCD goods. AUO will be reducing its worldwide workforce by 2% or 700 employees starting in January 2009. AUO employs about 38,000 workers on a global basis. The company stressed that workforce adjustments are conducted annually. I am sure the workforce reduction is a direct result of the expected anouncement of poor results for Q4’08.
Other Taiwan-based companies such as Chi Mei Optoelectronics (CMO) and Wintek have reduced their workforce as well. CMO recently received urgent orders for LCD TV panels that will give a much-needed boost to its LCD fab utilization rates, which were just 20% – 30% in November and December. The urgent order will bring utilization rates close to 50%. With inventory drying up any large bump in expected demand will result in emergency LCD panel orders.
With LCD fab utilizations at just 60% in Q4’08 and entering into a seasonally weak first half, AUO as well as other LCD manufacturers are in for a bumpy ride.
Source: DigiTimes
[tags]AU Optronics, AUO, LCD Manufacturer, Display Manufacturer, Chi Mei Optoelectronics, CMO, Wintek[/tags]
Although Q4’08 was extremely difficult for LCD manufacturers in Taiwan, tidy profits from the first three quarters will lead major Taiwan-based LCD manufacturers to report profits for 2008. Here are some estimates:
AU Optronics (AUO): NT$30 billion in profits for 2008
AUO reported NT$48.2 billion in net income for the first three quarters in 2008. AUO’s losses in Q4’08 are estimated to be about NT$18 billion with a net profit for the entire year in 2008 of around NT$30 billion.
Chi Mei Optoelectronics (CMO): NT$4.8 to $9.8 billion in profits for 2008
CMO reported NT$24.8 billion in net income for the first three quarters in 2008. CMO’s losses in Q4’08 are estimated to be about NT$15 – 20 billion with a net profit for the entire year in 2008 of around NT$4.8 to 9.8 billion.
It is not surprising that Taiwan’s two largest LCD manufacturers will post profits for the entire year in 2008. However losses in Q4’08 huge and losses, though smaller, will most likely continue through the first half of 2009. Innolux Display, Chunghwa Picture Tubes (CPT) and HannStar Display after the break. (more…)