Some Display Makers Still
Focus on Notebook Screens."> At least one Taiwanese LCD manufacturer is considering cutting panel production for PC displays in order to increase its output of LCD panels for notebooks. One such company is Chunghwa Picture Tubes (CPT), Taiwans third-largest producer of LCD panels and a major supplier for Dell Inc. According to recent local press reports, Dell is pressuring CPT to increase its notebook TFT LCD deliveries. "CPTs full notebook panel capacity cannot supply Dells total demands," said Simon Tu, an analyst at SinoPac Securities Corp. of Taipei. "I think the company may reduce some of its 15- or 17-inch monitor capacity and transfer it to notebook usage.""We have been hearing for several months that Dell wants to block out Chunghwa Pictures production to make sure it has enough panels," said Martha Chen, an LCD panel industry analyst with Primasia Securities Co. in Taipei. "But my understanding is that Chunghwa is negotiating this on a monthly [basis] rather than the usual quarterly basis as they dont want to let Dell block all of their production." Meanwhile, the rise in LCD prices this year has created a ripple in the cost of other components found on PC logic boards. The additional cost lead PC makers to limit the amount of memory shipped in their systems in order to keep the total prices of a PC constant. As a result, fourth-quarter spot prices for the most widely used PC memory chips slipped to $3.70 from a peak of $4.78 in August 2003. "We didnt anticipate rising prices for other components," said Crystal Lee, a DRAM analyst with ABN Amro Bank NV of Amsterdam. "Sales of PCs and components such as flat-panel displays are good, but memory chip sales arent." Just as the flat-panel prices are up, they will come down. The only question is when. Analysts said the flat-panel industry is prone to cycles of over supply and shortage as Taiwan and South Korea compete for customers. "The TFT LCD market remains cyclical and recent results and forecasts show we are very much in the middle of an upswing," said Ross Young, president of DisplaySearch. "Large-area unit shipments are expected to rise 42 percent in 2003 to 97.2 million units, with revenues up 32 percent to $23 billion." Discuss This in the eWEEK Forum
According to press reports, CPT insiders said the company could not guarantee that it can supply the 4 million TFT-LCD panels Dell expects it will need from the screen manufacturer in 2004.