Makers improvise to sustain supply market

Makers improvise to sustain supply market
Makers project the decrease in order volumes that started in October 2008 will persist until late 2009. With some companies starting to feel the crunch not only in their export business but also in their domestic sales, especially with local buyers declaring bankruptcy, more suppliers are exploring ways to stay afloat.
Suppliers predict more consolidation and mergers in the next few months with more small companies dropping out of the LCD module line. At present, makers with monthly capacity exceeding 1 million number no more than 20. However, prospects are brighter for some companies that produce TN/STN- and TFT-LCD modules, specifically large-scale manufacturers, as demand inches up and costs dip.
Several companies are reducing their losses by speeding up product turnaround and locking exchange rates to those quoted when orders were placed. Other makers are acquiring automated production equipment for labor-intensive LCD module lines.
Price-wise, fluctuations are inevitable, China makers say. A 100x64 dot graphics STN-LCD module is priced at $5 to $6; a 4.3in TFT-LCD module at $18 to $19; and a 17in TFT-LCD module at $160 to $170. However, given vacillating costs and diverse applications, TFT-LCD modules are not always more expensive than TN, STN or CSTN types. For instance, some FSTN graphic LCD modules can fetch as high as $34. Makers project that prices of TN-, STN- and CSTN-LCD modules will remain stable in 2009, but quotes for TFT-LCD modules will likely fall.
About 75 percent of the cost of manufacturing LCD modules is spent on LCD panels, backlighting units and ICs. TFT panels, on the other hand, are largely sourced from tier-one companies such as Chi Mei Optoelectronics (CMO) and LG Electronics.