Hard to make money in LCDhttps://www.chinapost.com.tw/business/detail.asp?GRP=E&id=68247
Standard & Poor's (S&P) and Taiwan Ratings Corp. (TRC) yesterday asked investors to closely monitor the latest development in the thin film transistor liquid crystal display (TFT-LCD) sector as its tendency for aggressive spending on facilities and volatile profitability will further slow down corporate earnings.
"To keep pace with rivals in Korea, Taiwan's five TFT-LCD manufacturers have incurred large negative free-cash flows due to heavy capital spending on advancing production facilities," said in the statement provided by the two agencies, "As a result, they have had to use debt and equity finance to fund their capital spending."
The report further indicated that as of June 2005, the aggregate debt of these five manufacturers has reached NT$333 billion, up from NT$183 billion at the end of 2003.
While the report showed big flat panel makers such as AU Optronics and Chi-Mei maintained resilient growth, the competition is beginning to make it harder for small makers to survive.