Chi Mei Aims to Keep Market Share in Mainland China

Wed. September 02, 2009; Posted: 07:50 AM

BEIJING, Sep 02, 2009 (SinoCast Daily Business Beat via COMTEX) -- CMIQF | Quote | Chart | News | PowerRating -- Chi Mei Optoelectronics Corporation (TPE: 3009) will strive to sustain its market share in the Mainland China and concern about an oversupply resulting from its peers' production capacity expansion, the general manager for the Taiwan-based thin film transistor-liquid crystal display (TFT-LCD) panel maker said in an interview.

Although it is bullish on the new wave of economic growth in the Chinese mainland pushed by consumption, the company will keep its market share in the mainland and aim to expand globally amid the increasingly furious competition. Of the panels needed by local TV makers in the mainland, 40% come from Chi Mei.

Recently, BOE Technology Group Co., Ltd. (SZSE: 000725) kicked off the construction of its 8G TFT-LCD production line, which is located in Beijing and will lure an investment of CNY 28 billion in total.

In addition, Samsung Electronics, LG Display, as well as Sharp were all reported to build 8G panel plants in the mainland.

TFT-LCD panel makers cannot neglect the Chinese mainland market, which will become a large single market and even outpace Europe and the US. However, according to its annual demand, the mainland market is forecasted to need two 8G panel plants at most. Manufacturers should not cast their eyes on one single market. In stead, they should consider the global market.

Chi Mei is the world's fourth-largest TFT-LCD panel supplier, ranking after South Korea-based Samsung Electronics, LG Display, and AU Optronics Corp. (TPE: 2409). With its headquarters in the Tainan science park in southern Taiwan, the company also owns module plants in Ningbo and Foshan.

Impacted by the global financial crisis, Chi Mei started to incur losses since the third quarter of last year and scored losses of TWD 31.083 billion in the fourth quarter of 2008.

The Taiwanese TFT-LCD panel maker saw a nearly 40% drop in its LCD panel export volume in the last two months of 2008 because of the shrinking demand from Europe and the US. Its losses narrowed down in the first half of 2009.

Chi Mei earlier adjusted its capital spending for 2009 to TWD 40 billion, lower than the capital spending of TWD 104.5 billion for the previous year.

Capital investment in future will be conservative, pointed out the general manager, adding that the capital spending for next year will depend on the commence of the company's 8.5G panel plant.

(USD 1 = TWD 32.9)

Source: www.enet.com.cn (September 02, 2009)

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