AU Optronics, other flat-panel makers face parts shortages

AU Optronics Corp., Taiwan's biggest maker of flat-panel displays, said surging sales of flat-screen televisions has caused a shortage of parts.

That may hinder plans by computer makers like Dell Inc. to begin producing the TVs.

Component suppliers such as glassmaker Corning Inc. and Novatek Microelectronics Corp. said they have more orders than they can fill in the US$37.7 billion market for flat screens used in mobile phones, notebook computers and TVs. Shortages of some parts may last six months, AU Optronics Executive Vice President Lu Po-yen said in an interview.

Rising display prices may benefit companies like Corning and screenmakers such as Samsung Electronics Co. that produce their own components, while narrowing profit margins for Benq Corp., Lite-On Technology Corp and other display assemblers. Competition for parts may worsen as computer makers such as Dell and Hewlett-Packard Co. start making flat TVs.

"What's driving the tightness is demand for TVs," said Pedro Tai, who counts shares in Taiwanese flat-panel makers among the equivalent of US$200 million he helps invest for ABN Amro Asset Management Taiwan. "The more upstream you are, the better off you are. The assemblers' value-added is lower."

600450 AU Optronics, other flat-panel makers face parts shortages
Date: 13 October 2003

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