Chinese considered unlikely to hurt Taiwan PC, LCD makers
The rise of China’s technology supply chain is unlikely to pose a threat to Taiwanese manufacturers of personal computers and liquid crystal displays in the near term, according to a Japanese brokerage.
The brokerage said it had just completed a one-day marketing trip to Malaysia, where investors asked about whether the Chinese tech supply chain would be a formidable threat to Taiwan in the near future.
“We believe the PC market is already ex-growth and hence appears to be less attractive to Chinese competition, while Taiwanese manufacturers are already running at an ultra- lean cost structure,” the brokerage said in a note to clients dated June 8.
“So we don’t think Chinese competitors could be any meaningful threat to the Taiwanese PC supply chain in the near term,” the Japanese brokerage said.
Under Taiwanese regulations, the name of the brokerage cannot be reported because it was offering specific forecasts that could influence the market.
On the LCD sector, the Japanese brokerage said Chinese competition has been in the market for a while and that Taiwan panel makers have been able to defend their average selling prices of products and protect their operating margins through screen size diversification and feature upgrades.
As a result, Taiwan LCD makers should be able to maintain their profitability in the next two to three quarters, the brokerage said.