Jan. 21, 2002

The outlook for Taiwan LCD monitor makers will not necessarily be good for every player this year. Taiwan shipped nine million LCD monitors last year, and the global market is expected to grow from 15 million units last year to 25 million in 2002. However, with intensifying competition, some in the industry predict that more than 60% of Taiwan's LCD monitor producers, especially smaller companies lacking niche products will be forced to exit the business.

Taiwan is home to close to 100 LCD monitor manufacturers.

Last year, the difference between end-product LCD monitor OEM prices and component TFT LCD prices was large, enabling even smaller producers with monthly shipments of around 10,000 units to make reasonable profits. However, TFT LCD component prices have increased every since the fourth quarter of 2002 while LCD monitor end product prices have not changed much.

Furthermore, local TFT LCD producers predict that, except for the second quarter slow season, TFT LCD supply will be very tight this year. Large monitor makers with monthly shipments of over 70,000 to 80,000 pieces will have a stronger price bargaining power and be given priority in receiving supply

Most leading makers in the component line have received unprecedented big orders, including A>U Optronics Corp., (formerly Acer Display Technology and Unipac Optoelectronics Corp.) Chunghwa Picture Tubes Ltd. Chia Mei Optoelectronics Corp., (CMO), and HannStar Display Corp.

Industry sources said much of the new demand comes from end users, private and corporate, who watch the present price levels of LCD monitors and feel it is time to replace traditional cathode-ray monitors in their offices.