China forecast to cut flat panel orders


TAIPEI — Chinese firms may gradually reduce their orders for flat panels from Taiwan over the next few years in light of the expanding production among China’s domestic panel makers, Taiwan’s main trade promotion body said Thursday.

In 2012, China’s flat panel production accounted for 9.9 percent of the total volume on the global market, as its investment in the sector continued to grow, said Chao Yung-chuan, president and chief executive officer of the Taiwan External Trade Development Council (TAITRA).

The figure is expected to rise to 13.2 percent in 2013, making China the third-largest flat panel producer across the globe, behind South Korea and Taiwan, he said at a local flat panel conference hosted by research firm NPD DisplaySearch.

Although a group of Chinese buyers is expected to proceed June 18 on their annual visit to Taiwan, their procurement is likely to shrink gradually over the next few years, Chao said, citing the group’s leader Bai Weimin, deputy director of the China Video Industry Association,

“Chinese companies such as BOE Technology Group Co. and China Star Optoelectronics Technology Co. have been improving the quality of their panels to meet the requirements of some big international customers,” Chao said.

“Bai told me that Chinese panel makers, as well as factories in which South Korean and Japanese firms have invested, will likely become powerful challengers to Taiwanese companies in the future,” he said.

Bai’s procurement group, which has been visiting Taiwan annually since 2009, last year pledged US$4.5 billion in flat panel orders from Taiwan.

In 2009, 2010 and 2011, the group projected flat panel purchases of US$4.3 billion, US$5.3 billion and US$5.5 billion, respectively.

Eventually, however, it bought US$3.4 billion, US$4.3 billion and US$4 billion worth of flat panels in those years, respectively.

David Hsieh, vice president of the Greater China market at DisplaySearch, said Chinese panel makers can now supply about 80-90 percent of the 32-inch TV panels required by major TV brands on the China market.

These Chinese TV brands, however, will still rely on Taiwanese suppliers for flat panels between 46 and 55 inches, as Chinese panel makers are still lagging behind in terms of production capacity for those sizes, he said.