Varitronix counts on growth in LCD units
Varitronix International is pinning its growth hopes on liquid crystal displays (LCDs) for car dashboards and a switch by mainland mobile phone makers to colour panels.
German and United States carmakers were the main targets for dashboard LCD panels, which would use organic light emitting diodes (OLEDs), chairman CC Chang said.
About $60 million has been invested in OLED research. Mass production is scheduled to begin in 2005, when demand for dashboard displays is expected to take off.
On the mainland, the replacement of handsets that used black-and-white display panels with colour models would generate demand, Mr Chang said.
The growing trend of outsourcing production and shifting manufacturing to the mainland was also a benefit, he said.
Varitronix has partnered with a central government-sponsored handset design house to produce LCD panels for mainland manufacturers.
Domestic brands such as CECT, Konka, Ningbo Bird and Haier source panels from the design house for some of their models.
On Monday, Varitronix reported first-half net profit rose 37.1 per cent year on year to $67.01 million. Turnover increased 22.8 per cent to $613.05 million.
The company said second-half revenue would probably exceed that of the first half as growth momentum continued.
But its Malaysian LCD plant would not turn a profit this year.
Varitronix has earmarked $140 million for capital expenditure this year. Although the company has $728 million in cash available, it said it had no plans for a merger or acquisition.