Taiwan TFT-LCD Industry`s Product Inventory Hits Record Low

Backed by concerted effort, the product inventories at Taiwan`s thin film transistor-liquid crystal display (TFT-LCD) panel manufacturers have declined to a record low.

Industry sources said that all major TFT-LCD panel makers` product inventories are down to less than one month, which is expected to fuel future panel price hikes and minimize losses.

Eddie Chen, Chief Financial Officer (CFO) of Chi Mei Optoelectronics Corp (CMO), the second largest TFT-LCD panel maker in Taiwan, pointed out that his company`s product inventory has been effectively decreased since the fourth quarter of 2008, without disclosing specifics of the current inventory.

CMO`s Executive Vice President Kuo Cheng-lung pointed out that the demand/supply interaction in the TFT-LCD industry has turned around so all the LCD panel suppliers have been carefully adjusting production capacity and product inventory to more precisely control cost and loss.

James Wu, CFO of Chunghwa Picture Tubes Ltd (CPT), the No. 3 panel maker on the island, pointed out his company`s inventory has decreased by one-third. The company`s President Kay Chiu stressed that the whole industry`s inventory has downed to a very low level and forced panel makers to hike prices if they win new orders because market prices have been below cash cost.

CMO`s Vice President Kuo stressed that the panel-price rebound would depend largely on Korean panel suppliers` attitude, who first began price-slashing competition in 2008 and their moves would affect the pricing trend of panels.

Without the burden of inventory, most panel makers in Taiwan refuse to take orders for products priced under cash cost, implying cautiousness toward uncertainties in future business climate.

Source: CENS