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Taiwan's Chunghwa Picture Tubes to lay off 2,500 employees

Chunghwa Picture Tubes plans to lay off 2,500 from its factories in Taoyuan

(Image from

(Image from

TAIPEI (Taiwan News) -- As part of its reorganization plan under bankruptcy, Chunghwa Picture Tubes Ltd. (中華映管), today announced that will lay off approximately 2,500 employees.

Under its bankruptcy reorganization plan, Chunghwa Picture Tubes Ltd. stated that it needs to streamline its business content, consolidate some idle capacity, and save on distribution, personnel, and operating costs. Today, the company submitted its dismissal plans to the Taoyuan City Government Department of Labor and said that it will make every effort to assist employees in finding new jobs.

It is estimated that the company will layoff some 2,500 assembly workers from its production line. By the end of last year, Chunghwa Picture Tubes had about 4,500 employees, including 900 foreign workers. This round of layoffs will represent a 70 percent reduction in staff.

The company blamed the downturn in the economy for prompting its customers to shift to rival makers. Chunghwa has been criticized in the past for its overexpansion in China, which left it overly exposed when the trade war between the U.S. and China led to an excess supply of panels and collapse in prices.

It has been reported by local media that Chunghwa plans to apply for debt restructuring and debt negotiations with the court and banking groups. The company said that it would shutter operations of its 4.5 generation panel line, which mainly consists of industrial LCD displays and vehicle-based products.

The company is expected to implement the layoffs on May 10.

The company's idle 4.5 generation panel factory will be sold in the future to repay some of the firm's debts. However, an industry insider told Apple Daily that it was an unwise decision because the advantage of the automotive supply chain is that customers are much more stable and profit margins are higher than that of mobile phones and tablets.

A legal expert pointed out to Apple Daily that the company's retention of its 6 generation assembly line is a good way to evaluate the market and it can be used to make both vehicle-mounted and consumer screens. At this stage, the expert advised that the company first reduce its scale and focus on the development of niche products, such as high gross margin screens for automotive and industrial use.

After a court order to repay an outstanding loan on Dec. 13, the company abruptly suspended production at the Longtan and Yangmei factory locations in Taoyuan on Dec. 15 to formulate a plan for financial restructuring.