CMO is Taiwan’s second largest LCD manufacturer after AU Optronics (AUO). But size does not seem to have mattered when ASPs for TFT LCD panels fell much faster than the decrease in panel manufacturing costs. The second quarter, especially in the US, is a weak quarter and has been for many many years. It is surprising how LCD manufacturers are always upbeat about the second quarter when they see surprisingly strong first quarters.
Although CMO’s president Chao-yang Ho stated that he sees LCD TV and monitor ASPs growing single-digit percentages in Q3, most likely that will only apply to LCD monitor panels, which have been too low–below manufacturing costs in some cases. LCD TV panels will continue to slide, but at a slower pace. CMO lost NT$944 million (~US$29 million) in the second quarter, which is smaller than the loss it experienced in the second quarter of 2005 (NT$1.68 billion).
Looking ahead, CMO will continue to focus on the lower-end segment of the LCD TV market. Although recently it has snatched some business with Sony the majority of the panels are geared toward non-XBR units, most if not all of which are being supplied by S-LCD, Sony’s joint venture between Samsung. LCD suppliers will need to focus on the high-end markets to be competitive in the future. Most Japanese LCD suppliers have largely exited the mainstream notebook PC and LCD monitor panel market and have concentrated on high-end value-add models. That is one of the reasons why Sharp was able to post very good profits in the second quarter when most others were in the red.
Source: Yahoo! Asia News