Chunghwa Picture Tubes to suspend production at one of its plants

Taipei, Nov. 3 (CNA) Chunghwa Picture Tubes Ltd. (????), one of Taiwan's leading flat panel suppliers, has decided to suspend production at a 4.5-generation plant located in the Longtan District of Taoyuan City starting in mid-November. Chunghwa Picture Tubes said the decision, first announced by the company on Monday, reflected a slowdown in the global flat panel market, which has suffered from falling product prices amid a global supply glut. The affected 4.5-generation plant churns out small- and medium-sized displays largely for smartphone use, according to the company. Before that decision was made, Chunghwa Picture Tubes had already announced it would sell a 4th generation plant located in Bade in Taoyuan to Giantplus Technology Co. (??), another Taiwanese flat panel maker, for NT$1.8 billion (US$55.56 million). That factory produces displays for control devices used in industrial applications. Analysts said Chunghwa Picture Tubes has faced heavy pressure on its selling prices because of a general downturn in market prices for the small- and medium-sized displays the company specializes in. A market estimate showed that due to the slowing growth in the global smartphone market, prices of mainstream 5-inch displays used in cell phones, in particular, have fallen 20 percent since the beginning of this year. Analysts said that although the pace of the price downtrend has showed signs of moderating in the fourth quarter, prices remained at very low levels, hurting Chunghwa Picture Tubes' bottom line. In the first half of this year, Chunghwa Picture Tubes incurred a loss per share of NT$0.36, compared with NT$0.01 in earnings per share posted over the same period of last year. Chunghwa Picture Tubes said its efforts to streamline production are expected to help the company improve its efficiency as it assigns production to other plants, resulting in lower operating costs and a stronger competitive edge. After restructuring its manufacturing operations, Chunghwa Picture Tubes will continue to operate another 4.5-generation flat panel plant and a 6th generation display plant , both located in Longtan. The company said it has reported to the Taoyuan City government that it plans to lay off 525 employees after it revamps its production base. (By Pan Chi-I and Frances Huang)