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Panel makers venturing into small and medium formats

TAIPEI, Taiwan -- Despite its perseverance in making large-format panels, AUO Optronics Corp. (AUO, 友達) has now joined the likes of Hannstar (彩晶) and Chunghwa Picture Tubes (CPT, 華映) in making a foray into the small- to medium-format touch-screen panel market, according to reports.

With branded TV makers holding ample inventory, the price of large-format panel prices have been affected, with declines observed throughout June. Industry research institute DisplaySearch estimated the price cut at between 1 and 2 percent.

The institute said that Sharp had dramatically increased its output of 32-inch panels, significantly disrupting the market. The average price for 32-inch OpenCell panels fell by US$1 at the end of June, it added.

Industry commentators stated that under the pressure of falling large-panel margins, companies such as CPT and Hannstar have been aggressively transitioning toward the small- to medium-format market. The move has been fruitful, with Hannstar recording positive earnings last year at the end of the fourth quarter, while CPT is expected to turn a profit by the end of August, said commentators.

Meanwhile, Innolux (群創) recorded positive results this year at the end of the second quarter. The company has since rebased its manufacturing from China to a new multi-role plant in Tainan, vertically integrating the production of modules including touch sensors and LCDs, in a move to cut down logistical costs and optimize output capacity.

AUO likewise reported improving performance, however the company said that its entry into the small- to medium-format market would require significant development and expansions. The company stated that it is actively establishing vertical integration of production, in an effort to pursue the new market.

However, the market is rife with rumors that TPK (宸鴻) and Wintek (勝華) intend to contest the market with price competition.

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