WitsView, a market research company based in Taiwan, suggests in a report that second tier display manufacturers in Taiwan should work together and form a strategic alliance. These panel suppliers are Chunghwa Picture Tubes (CPT), HannStar Display Corp. and Innolux Display Corp.
In the LCD industry, there is a cycle called the Crystal Cycle that provides LCD suppliers a tremendous profits and excrutiatingly painful losses. The largest panel suppliers such as Samsung, AU Optronics (AUO) and LG.Philips LCD (LPL) have been able to weather downturns quite well while the smaller manufacturers have not. This has changed to some extent with LPL reporting record losses in the second quarter of 2006, but in general, the smaller you are, the harder it is to weather the downturns. By forming a strategic alliance, as suggested by Witsview, the CPT, HannStar and Innolux might be able to endure downturns with strength.
Source: Taipei Times