In the first quarter of 2006, growth of the global LCD (Liquid Crystal Display) TV market slowed down sequentially, dampening growth momentum for the Taiwanese LCD TV industry. However, the Taiwanese LCD TV shipment still racked up slight growth. Affected by weather conditions and rising oil prices, demand in the European market slackened, leading to lower-than-expected growth in the European LCD TV market. However, owing to the continuing placement of orders by major home appliance vendors and channel players, Taiwanese shipment to the North American market maintained steady growth. As a result, shipment volume of the Taiwanese LCD TV industry reached nearly 1.8 million units in the first quarter, up 6.7% sequentially.

Due to increased shipment volume of LCD TVs and enlarged shipment share of large-size high-end models, shipment value of the Taiwanese LCD TV industry surpassed US$1.1 billion in the first quarter of 2006, up 158% year-on-year and 13% sequentially. Although price reduction of LCD TV panels triggered a decline in LCD TV prices, the significant shipment growth of 32-inch and larger LCD TVs intended for living rooms and the increased production share of large-size and high-resolution digital models enabled the average FOB (Free on Board) price of Taiwanese LCD TVs to rise about 11% sequentially in the first quarter, to approximately US$646.

Looking ahead to the second and third quarter, with Taiwanese LCD panel makers gradually improving the yield rates of their 6G production lines and Korean makers starting mass production in their 7G and 7.5G production lines, prices of LCD TV panels are expected to drop further, stimulating demand in the LCD TV market.

Price competition for 32-inch LCD TVs in the first half of 2006 is expected to continue into the second half of the year and spread to 37-inch and larger models as well. It is expected that in the second half of 2006, shipment of 37-, 40-, and 42-inch LCD TVs will grow rapidly, replacing 32-inch LCD TVs as the mainstream models in the industry.