09.26.2001
TFT-LCD makers await price recovery

• Development: Reports suggest Taiwan TFT-LCD makers plan to raise panel price following Samsung and Hitachi, which plan to increase 15-inch SXGA prices used in notebook PCs. Meanwhile, Taiwan makers indicated a positive outlook for 4Q01 shipment.

• Analysis: We do not foresee panel prices rising in 4Q01 due to continued over-capacity in the industry. Supply will continue to expand with two new Taiwan TFT-LCD lines starting mass production in 4Q01. We expect price recovery is likely to occur in 2Q02 due to an increased penetration rate for LCD monitors and declining capex spending.

• Primasia View: AU Optronics remains our top pick in the sector due to economy scale and broad product mix. We recommend L-T Buy on recent stock price decline and industry recovery expected in 2002..