Despite some shifts in orders to Korean competitors, production volume and value for the Taiwanese LCD monitor industry are expected to undergo 103.3% and 97.3% year-on-year growth respectively by the end of 2002, according to a report by Market Intelligence Center (MIC), a Taiwan-based IT industry intelligence and consultancy firm. Total production volume is forecasted to grow to 18.8 million, while production value is expected to increase to US$6.2 billion. Although Taiwanese makers will see some reductions in orders, production will continue to climb in the third quarter due to CDT replacement, and through promotional activities by PC retailers in the fourth quarter.
Faced with lackluster market, leading brand name PC vendors have been increasingly bundling PCs with LCD monitors to spark sales. Such promotional strategies have had a strong affect on Taiwanese monitor size mix. By the end of 2002, high-end models, which include monitors 17-inches or larger, will account for over 32% of production.
Several large manufacturers that focus on production of such high-end models are planning to move manufacturing to China in the second half of 2002. "Previously, Taiwanese LCD monitor manufacturers operated a greater portion of smaller screen production in China, while high-end manufacturing was undertaken in Taiwan. However, by the end of the year the bulk of high-end monitors will be moved to China, leaving only a few 15-inch monitor makers in Taiwan," added Sean Wu, Industry Analyst with MIC. The Taiwanese LCD monitor industry's share of production in China had already jumped to over 60% in the second quarter of 2002.
"As the rate at which vendors bundle PCs with LCD monitors increases, Taiwanese shipments to the United States have seen a dramatic rise," said Wu. The United States accounted for 31.2% of shipments in the first half of 2002, compared to 21.8% for the same period in 2001. "However, China is becoming an increasingly important market for the Taiwanese LCD monitor industry," Wu noted.
In the first half of 2002, the Taiwanese LCD monitor industry reached new heights. Production volume grew to 8.6 million units, a rise of over 195%; however, production value failed to grow as quickly due to a drop in ASP from the level seen in the first half of 2001. Production value amounted to US$2.9 billion, an increase of 160%. "Despite a drop off in orders in June as brand name vendors turned to clear their inventories, the rush of orders flooding into Taiwan up until May contributed greatly to this growth," explained Wu.
Additionally, although Taiwanese share of worldwide production was somewhat beleaguered by the panel shortage of the first quarter, falling to 58.9%, share of production started to rise again in the second quarter to 60.8%. "With the panel supply situation settling down in the third quarter, and Taiwanese makers deriving volume production and cost advantages from moving manufacturing operations to China, Taiwan's market share is anticipated to rise yet further," added Wu. Korean makers accounted for 30.3% of worldwide production, while Japanese manufacturers accounted for 7.9%.