Chunghwa Picture cuts LCD output by 10%
Chunghwa Picture Tubes Ltd., Taiwan’s third-biggest maker of liquid-crystal displays, is cutting its LCD output by 10 percent this month and next, after posting its lowest gross margin in a year amid a supply glut.
The Taoyuan, Taiwan-based company reported yesterday net income of NT$1.02 billion, or 11 NT cents a share, for the second quarter. The gross margin, or the percentage of sales left after production costs, was 16.9 percent, the lowest since 10.3 percent in the second quarter last year.
Chunghwa Picture joins bigger rivals LG Display Co. and AU Optronics Corp. in announcing plans to reduce panel output, after forecasting prices will fall this quarter from the second quarter. LG Display, the world’s second-largest LCD maker, forecast this month third-quarter profitability will fall more than analysts estimated, as a global economic slowdown undermines demand for the displays used in mobile phones, computers and televisions.
“We are now facing an oversupply” situation, Kay Chiu, president of the LCD maker, told investors and reporters in a briefing in Taipei yesterday.
Prices of panels used in mobile phones and digital cameras will probably fall 5 percent to 10 percent in the July-September period from the previous three months, while those for portable DVD players and digital photo frames will also drop this quarter, Chunghwa Picture Vice President Lin Sheng-chang said.
The LCD maker also cut its panel shipment target for this year by 5 percent to 10 percent because of high inventories in China and Europe, Chiu said.
Tags: LG