Both Samsung Electronics and LG.Philips LCD recently announced a significant reduction in capital expenditure (capex) for 2007.
Samsung has cut its LCD capex by more than 40% to around US$1.5 billion while LG.Philips LCD has reduced its capex by nearly 70% to about US$1 billion, less than half of that of Chi Mei Optoelectronics (CMO).
The moves indicate the makers are now more conservative about the capacity expansion of their next-generation LCD plants.
Sources said the changes will help the makers in dealing with industry cycle changes in the future.
During a recent investors conference, Samsung said it is unlikely that an excessive panel price decline will take place in 2007, as various makers are delaying their capacity expansions.The impact of a slow season in the first quarter will not be as significant as it used to be since the makers are more disciplined in capacity utilization and expansion, Samsung pointed out.
Major global TFT LCD makers: Capex plans in 2006 and 2007 (US$b) | |||
Company | 2006 | 2007 | Y/Y |
AUO* | 3.51 | 2.74 | (21.9%) |
CMO | 3.05 | 2.44 | (20.0%) |
Samsung** | 2.71 | 1.51 | (44.3%) |
LPL | 3.25 | 1.07 | (67.1%) |
*AUO capex includes those from Quanta Display (QDI), which was merged into AUO in October 2006
**Samsung's capex here only includes LCD capex
Source: Companies, compiled by DigiTimes, January 2007
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