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Profitability of LCD makers forecast to improve in second half

2012/04/19 17:39:25

Taipei, April 19 (CNA) Flat panel makers in Taiwan and South Korea are expected to improve their profit margins in the second half of 2012, ending their losses in the past eight quarters, a U.S.-based market researcher said Thursday.

According to DisplaySearch, the profit margin for tier-one liquid crystal display (LCD) makers remained at an average of minus 10 percent in 2011, though the losses bottomed out in the fourth quarter of last year.

If panel prices increase 2 percent per month in the second and third quarters of this year based on increasing demand, the profitability of LCD makers may return to positive territory in the second half of the year, the display market research firm said.

"The panel supply will become tighter and tighter this year following the strong demand for panels used in notebooks, especially Ultrabooks," said David Hsieh, vice president of DisplaySearch in charge of the Greater China market.

"It looks like there is now no reason to be pessimistic," he said at the DisplaySearch Taiwan Flat Panel Display Conference.

For larger panels used in televisions, many TV brands have already begun talks with panel suppliers to secure their orders early for the year-end shopping season, Hsieh said.

He said DisplaySearch has found a tightening supply of mainstream TV panels sized 32, 40 and 42 inches, while demand is even higher for the new size of 39 inches that is supplied mainly by Taiwanese companies.

This is because many Chinese TV brands do not just sell the 39-inch TVs in China but also export them to the North America market, driving the demand for the size, Hsieh said.

(By Jeffrey Wu)