Hon Hai to step Into LCD TV market

In view of the rapidly growing global LCD (liquid crystal display) TV market, Innolux Technology, a leading panel and monitor maker under the Hon Hai Group, is preparing to jump into the sector.

Capacity of the global LCD TV market is expected to top 40 million sets this year, which is expected to climb further to 100 million sets in 2008. To tap the huge market potential, Innolux, which is likely to become the world's third largest monitor maker this year, has decided to make foray into contract production for the product.

The person in charge of the operation is Lu Po-yien, former executive vice president of AU Optronics, Taiwan's leading TFT LCD (thin film transistor, liquid crystal display) panel maker, now general manager of Hon Hai's LCD department, who will take charge of LCD TV assembly operation of Hon Hai and make preparations for the establishment of 7.5-generation TFT LCD panel production line.

Innolux stepped into the LCD monitor market last year, racking up shipment of 8 million units last year, half of which adopted panels supplied by its own 5th-generation panel production line and the other half by external sources. The company started to reap profits in the second half last year after achieving a scale of economy, and raked in NT$400 million of profit in 2005. Profit reached NT$80 million in the first quarter this year. With its monthly shipment volume for LCD monitors surpassing 1 million units in the first half this year, it is confident of reaching the shipment goal of 18 million units this year.

Tuan Hsing-chien, general manager of Innolux, once pledged that the company will not be absent from the booming LCD TV market. The company is expected to step into the market in the second half.

Market insiders noted that the timing is good for Innolux to join the market now. In the past, the market capacity was limited and the five leading brand vendors in the line boasted integrated operation, covering production from panel to system. However, with profits for LCD TV business having dropped to a razor-thin level, many LCD TV companies are ready to outsource production of low-end products.

The market potential is tremendous. Presently, there are 600 million to 700 million CRT (cathode ray tube) TVs worldwide, which may be substituted by LCD TVs in the next three to five years, due to the vigorous promotion of digital TV by governments around the world. In addition, there are new TV demand of around 100 million to 200 million sets a year, most of which will be for LCD TVs.

source & copyright: CENS