In the face of reshuffled relationships among competitors and clients in the display industry, AU Optronics (AUO) is not too worried that its long-term ties with clients will be much affected, according to company executive vice president Paul Peng.
Sharp has teamed up with Sony in building a 10G fab, and at the same time Sharp is actively seeking to expand its clientele base for its LCD TV panel output in order to fully utilize its capacity. Sanyo and Toshiba also have plans to purchase TV panels from Sharp.
Peng said some players are indeed changing their strategies. In the past, the panel output from these players has been meant for in-house use, but they have now started selling to others, he said.
But unless there are fundamental changes to the rules of the game and to the business models in the panel industry, the changed strategies should not be cause for too much of an alarm, Peng said.
As new applications are coming out constantly to boost demand and the overall market size is still growing, AUO is not worried about competitors changing their strategies, he said, adding AUO maintains long-term relationships with its clients.
Although some clients may source panels from other suppliers in the short term, they will still need support from long-term partners during high seasons, he said.
Citing the 32-inch panel segment as an example, Peng said at the beginning of 2008, supply for the segment was running short. But supply and demand later returned to balance after 32-inch panels from 8G capacity were available on the market. LG Electronics (LGE) also ramped up its output of 32-inch PDPs, which helped ease demand for LCD TVs of the size, he said.
But not much 8G capacity may be available for the 32-inch segment when the high season comes, and that will open up opportunities for AUO and other panel makers, he said.
Although LCD TV sales have been sluggish in the second quarter, Peng said the period is a traditional low season, and there should not be too much worry about the market. Despite the recent economic downturn and rising oil prices, Peng said demand for TV panels remains stable.
AUO executive vice president Paul Peng
Photo: Digitimes
Article translated by Rodney Chan
