Weak US sales of TVs hit LCD makers

Taipei, Taiwan – Taiwan’s LCD panel makers face another unprofitable quarter as demand from Chinese TV factories falls behind expectations.

The top two suppliers, AU Optronics and Chi Mei Optoelectronics, said China would account for between 20 and 30 percent of their TV panel shipments this year, with the US and Europe remaining the major markets.

The Photonics Industry and Technology Development Association (PIDA) warns that earlier expectations of $4.4 billion worth of Chinese orders for flat panels may be optimistic.

“Demand from Chinese companies will indeed be helpful, but the impact will not be as significant as some expected, since Chinese companies purchase only a portion of their total panel needs from Taiwanese firms,” PIDA analyst Karen Ho told the Taipei Times, adding that the recent jump in demand could end later this month as happened last year, indicating weak demand in the third quarter.

Although prices have recovered over the last few months, makers of LCD panels are still losing money, often selling them for less than the cost of production.

While prices are expected to increase by between 10 and 15 percent this quarter, any improvement could be fleeting if US and European consumers don’t start buying new TVs in increasing numbers.