William C. Pao,The China Post
The production value of large-size TFT-LCD monitors reached NT$48.21 billion in Q1, a 230.6-percent increase from the same period last year and a 52.7-percent increase from Q4 2001, due to continued rise in LCD price, according to numbers released by the Industrial Technology Information Services (ITIS) project under the Ministry of Economic Affairs. The same study suggested the total production value this year will amount to NT$201.2 billion, or a 2.34-time increase from the NT$85.8 billion last year. ITIS analyst Chen Mao-cheng said the price of 15-inch LCD monitors, which account for 70 to 80 percent of Taiwan’s total output, is expected to reach US$280. Chen however said there is a possibility the current price of US$265 has reached a ceiling and said whether it may reach US$280 remains to be seen.
The continued upward trend in the LCD price may lower profits of downstream manufacturers, the study said. When asked about South Korea companies’ prediction that the price of 15-inch monitors may reach US$300, Chen said Taiwan manufacturers should stick to more conservative estimates, adding too much of a price hike may not be a good thing. He said the continued price increase in Q1 may have resulted from increased orders from downstream companies. He stated the current price of US$265 accounts for 65 percent of the cost for making a 15-inch monitor. If it grows to US$280 it will then account for 70 percent of the cost, a situation not in the best interest of downstream companies and end users. As for the higher-end 15-inch monitors used for notebook computers, a lack of supply due to insufficient production capacities has pushed the price to US$310, which accounts for 20 percent of the cost. The upward trend is therefore expected to continue. The production value of TN/STN-LCD in Q1 was NT$5.5 billion, a 13-percent decline from Q1 2001 and 7-percent decline from Q4 last year, due to the lack of applications, said ITIS analyst Yang Mei-ping. The Q1 production value of small- to medium-size LCD monitors was NT$1.51 billion, a 10.9-percent increase from the same period last year and a 18.2-percent growth from Q4 2001. Yang pointed out the total production value of LCD monitors last year was NT$114.97 billion, a 31.7 percent increase from 2000, due to increased shipments of large-size LCD monitors. Contrasting with the ITIS report, Merrill Lynch said the price for 15-inch LCD monitors may go down by US$20 to US$30 during the bottom half of the year, due to high inventories and lower demands in July and August.