LCD shortage cuts into global sales

PUBLISHED : Wednesday, 21 January, 2004, 12:00am
UPDATED : Wednesday, 21 January, 2004, 12:00am

A shortage of liquid crystal display (LCD) panels from Taiwanese suppliers is keeping pressure on mainland manufacturers of computer monitors, which are unable to fulfil orders due to lack of supply.

The shortage is also putting pressure on margins. According to Wang Xin, vice-general manager of Shenzhen Irico-Royal Information Electronics, a Taiwan-invested manufacturer of monitors, prices for 15-inch panels would not fall below US$200 this year from $250 at present.

The shortfall has persisted since March last year, as demand grows for LCD panels to be used in desktop-computer monitors, laptops and LCD televisions.

Mr Wang estimated the global shortage of LCD panels at about 18 per cent this year but said it could ease in the second half.

'We cannot guarantee fulfilment of most of the orders for our LCD monitors. This will impact greatly on our revenues and profit margins,' he said.

TPV Technology corporate finance director Shane Tyau said the supply situation had been improving. 'For 2004, we expect to see pretty tight supply of LCD monitors but not as bad as last year,' he said.

Hong Kong-listed TPV manufactures monitors on the mainland.

Mr Wang said Irico-Royal, which has factories in Shenzhen and Dongguan, could produce 8.6 million LCD monitors annually but was operating well under capacity. Manufacturers such as Irico-Royal and TPV import LCD panels from Taiwan and Korea, then assemble them on the mainland.

In theory, the fact that low-cost mainland companies assemble most of the world's LCD monitors should significantly lower their prices, according to a report by Global Sources.