Chi Mei Optoelectronics (CMO), the second largest LCD manufacturer in Taiwan after AU Optronics (AUO), announced on November 19, 2008 that it has decided to delay its G8.5 LCD fabrication plant construction. One of the main reasons is to concerve cash while the other possible reason might be that 2009 might not be a good year to bring on extra capacity. Phase I of CMO’s G8.5 LCD fab is underway. Equipment installation has begun allowing for a total glass substrate input capacity of 30,000 sheets per month. Volume production was slated to commence at the end of 2009 but that has been pushed back to 2010. Phase II, which generally adds an additional 30K/mo of input capacity, has been put on hold without a firm date.
CMO’s CAPEX for 2009 is expected to be less than NT$40 billion (about US$1.2 billion). Total CAPEX in 2008 has been planned for NT$108 billion but that is based on a NT$25 billion CAPEX in Q4’08, which will most likely materialize. CMO is reported to have NT$48.2 billion in cash and cash equivalents at the end of Q3’08 and plans to acquire a syndicated bank loan of NT$60 billion and short-term loans worth NT$10. Cash and cash equivalents will total more than NT$100 billion for CMO in the near future. With demand for LCD goods deteriorating LCD manufacturers have had to reduce their LCD fab utilization rates. Normal rates usually hover around the high 80% and low 90% range but CMO has reported utilization rates in the range of 60-70%, considerably lower than normal levels. This also has a significant impact on component suppliers such as 3M (optical film), and Corning (glass).
[tags]Chi Mei Optoelectronics, CMO, LCD Manufacturer, Display Manufacturer[/tags]