CMO to Expand Panel Supply After Funai Acquires Philips' N. America TV Biz

Taipei, April 21, 2008 (CENS)--Chi Mei Optoelectronics Corp. (CMO), the No. 2 thin film transistor-liquid crystal display (TFT-LCD) panel supplier in Taiwan, is expected to benefit from increasing panel orders placed by Funai Electric Co. Ltd. of Japan, which just announced acquiring Royal Philips Electronics' LCD TV business in North America.

Funai recently announced reaching a brand licensing agreement with Philips, under which Funai would take charge of sourcing, distribution, marketing and sales activities of Philips' consumer TV business in the United States and Canada.

The five-year agreement will take effect on September 1, 2008, with Funai to pay royalty payments in exchange for the exclusive right to use the Philips and Magnavox brand names for TV sales in North America during the period.

Through the acquisition, Funai's share of the global LCD TV market is expected to climb to 10%, translating into about 3.3 million TVs, from about 3% currently. CMO is a long-term panel supplier to Funai and signed a five-year agreement with the Japanese brand in 2006, under which CMO has to spare a certain panel capacity for Funai, while Funia, in turn, should give a US$400 million loan to CMO.

Philips is currently the world's No. 3 LCD TV brand, trailing only Samsung and Sony. The company shipped 8.55 million LCD TVs in 2007, garnering an 11% share of the global market, according to statistics compiled by DisplaySearch, the worldwide leader in flat panel display (FPD) market research and consulting.

Thanks to the increasingly fierce competition in the global market, more and more major international LCD TV brands, such as Sony, Philips, LG Electronics, Sharp, and even Samsung, have come or are coming to Taiwan to seek contract suppliers. These major LCD TV players are also big buyers of TFT-LCD panels. Samsung, for example, procured about 50%, or six million units, of its needed TV panels from Taiwanese suppliers (mainly AU Optronics, CMO, and Chunghwa Picture Tubes, Ltd.) in 2007.

Currenlty, Philips contracts mainly local TPV Technology Ltd. to supply the assembled LCD monitors and LCD TVs. TPV has acquired Philips' LCD monitor business division, and the assembler has also set up a strategic alliance with CMO.