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LCD panel producer Chunghwa Picture Tubes (CPT) has arranged pre-payment with its major customers for its LCD panels, reports Asian industry portal DigiTimes, quoting CPT President Chuang-Yi (Kay) Chiu.
The company has not yet announced to what extent or for what amount particular customers can pre-book their panels with the Taiwanese market leader.
According to industry insiders and rumours circulating on the market, however, the reason for this is a possible panel shortage in 2008, which has driven large OEM manufacturers Innolux Display and TPV Technology to place there orders with CPT in the form of pre-payments.
"In the face of the Christmas business, LCD devices in the 32-inch class are very much in demand from customers because of the low prices at the moment ", says Niels Seib, Communication Manager for Consumer Electronics at LG Electronics Deutschland.
Although the industry has been struggling with supply problems and resultant delivery problems since the second quarter, the strained supply situation for 2008 will worsen further, analysts agree.
Monitor production at TPV Technology (Pictures: TPV)
"We do not feel this pressure, are able to continue delivering without any difficulty and have positive expectations for the coming Christmas business ", Seib emphasises on the other hand. According to some sources, large-scale customers such as Innolux or TPV had underestimated the supply situation for 2007 and are striving to secure capacity for 2008 – as the pre-payments to CPT show.
Experts see this type of lage customer pre-payment to LCD panel manufacturers as a unique and unusual even within the entire industry.
CPT Vice President Jiun-yi (James) Wu also announced that customers who intend to pay cash in advance for LCD panels like TPV or Innolux must do so within 60 days. Otherwise, CPT reserves the right to reduce shipments in special cases or even cancel them as a result of the difficult supply situation. (Source: pte)