Japan FPD producers see sales up
09/01/1998
Japan FPD producers see sales up
After a difficult fiscal year, in which Japanese flat panel display (FPD) producers missed their overall sales goals by more than 20%, manufacturers expect display sales to soar during the current year. Capital spending will go in the opposite direction, dropping by more than half, as manufacturers digest large capacity additions made last year.
Market analyst Ross Young of DisplaySearch, Austin, TX, noted that the figures do not include a planned Sony-Toyoda Automatic Loom Works fab, which is expected to start adding equipment this fall, and also do not include a number of Taiwanese projects. However, DisplaySearch still sees worldwide LCD equipment sales dropping 20% this fiscal year from $1.53 billion in the year ended March 31. He added, "There will be a very big jump in 1999."
According to company reports from the top ten display producers in Japan, revenues are seen rising to 963.8 billion yen ($6.83 billion) this fiscal year, up 21.1% from last year`s 795.9 billion yen (see table). Last year`s actual production came in about 22% below projections made a year ago, due in large part to a slowdown in Japanese PC sales and the Asian financial turmoil of the last 12 months, which depressed display shipments at the end of the fiscal year.
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The advent of desktop FPD monitors is one driver for the expected surge in the current year; with prices dropping into the sub-$1000 range, significant volumes may start to be sold. Capital spending at Japan`s FPD companies almost doubled last year, at 233.2 billion yen ($1.65 billion), as producers geared up for larger glass substrates (which enable economical production of desktop-size displays). Display spending was not hit by the same cutbacks as semiconductor investment, although the total did come in slightly below original estimates of 246 billion yen. For the current year, spending is seen dropping to levels just below the 120.9 billion yen recorded in FY96 as new capacity is ramped into place.
Sanyo, which had a major slug of investment last year, is slashing its capital budget to just 6 billion yen ($425 million) from 47 billion yen, and NEC is cutting deeply as well, to 7 billion yen. Sharp, Toshiba, and Fujitsu are all making cuts of 50% or more. Second-tier supplier Casio is the only company envisioning an increase, but at very low overall levels. - P.N.D.