Taipei, Aug. 6, 2008 (CENS)--Chunghwa Picture Tubes, Ltd. (CPT), the third-largest thin film transistor-liquid crystal display (TFT-LCD) panel manufacturer in Taiwan, recently claimed that it had cut production by 10% in the second half of July.

CPT president Kay Chiu made the statement at his company`s second-quarter shareholder meeting. He also pointed out that CPT is scheduled to continue the production reduction plan to the end of August and the company`s annual shipment goal would be adjusted down by 5% to 10%. CPT has also decided to postponed its new-generation panel-plant investment project.

Chiu said that that the unfavorable overall environment drove the panel prices down stiffly so CPT decided to cut production by 10% for inventory adjustment. In addition, he added, CPT delayed the next-generation investment plan due mainly to strategic partners` more cautious attitude.

According to CPT chief financial officer (CFO) James Wu, his company`s second-quarter shipments of large-sized (over-10-inch) panels decreased 0.6% from previous three months while the panel average selling prices (ASP) fell by 6%. The shipments of small/medium-sized panels in the second quarter also dropped by 28.8% sequentially due to weak demand, while the revenue declined by 26.5%.

The CFO claimed that CPt`s scheduled capital spending of NT$15.9 billion (US$521.3 million at US$1: NT$30.5) in this year would not change and the amount would be utilized to expand the firm`s monthly sixth-generation (6G) capacity to 120,000 substrates from 90,000 as well as the color filters to 80,000 from 40,000.

CPT vice president Brian Lee said that his company would begin big-volume shipments of customized notebook PC panels to a Japanese customer in the second quarter, upgrading the share of such products from 20% to 25% in CPT`s overall large-sized shipments.

According to Lee, prices for small/medium-sized products declined by 20% to 25% in the second quarter only, and the market is still in oversupply. He forecasted that small/medium-sized panel prices would continue to fall in the third quarter to lower than the current average price of US$15. Lee said that CPT has cut production volume of 7-inch panels by over 30%.

Currently, shipments of cellphone panels account for 10% of CPT`s overall small/medium-sized shipments, Lee said, but the share is expected to greatly rise in the fourth quarter this year after CPT begin shipments to some first-class international cellphone brands.


(by Quincy Liang)