President Barack Obama has been spending considerable time on East-West trade agreements while in Asia, but for one chip maker, the negotiations between China and Taiwan are even more important.
Corning this morning said it suffered a power disruption over the weekend at its LCD glass manufacturing facility in Taichung, Taiwan which affected some glass-making operations.
The rush by Asian liquid-crystal-display makers to ramp up production at home and to invest in new plants threatens to curtail the nascent recovery in the flat-panel market.
LCD makers in Asia have just started to see their earnings recover in the second quarter after prices began to rise thanks to production cuts made last year, component shortages and strong demand from China.
Two years ago, Asustek wowed the world with the hottest selling computing product to arrive in recent memory: the Eee PC netbook.
Shares of both Seagate and Western Digital are getting battered on fears that the hard-drive sector could once again soon find itself with a glut of supply.
At least in part, the Street is reacting to this morning’s downgrade of Marvell by Barclays Capital, which as I noted earlier was in response to indications from Taiwanese component makers of a slowdown PC demand.
When the popularity of Barack Obama meets the popularity of iPod speaker docks, you get…an Obama iPod speaker dock.
But Taiwan-based Ozaki, the company behind the dancing President-elect, didn’t stop there. The Obama dock is part of its iMini line, which fuses the technology of an iPod dock, radio, alarm and speakers–and fuzzy fabric.
Despite deep discounts in stores, liquid crystal display inventory still far outweighs demand. Even though there are rumors of the Taiwanese government encouraging mergers between panel makers, reduced capacity for production would be unlikely to result–and the glut will most likely continue.
Shares of Silicon Motion–the Taiwanese maker of chips that control flash memory and computer cameras–are falling after the company this morning said the current quarter’s decline in sales will be much deeper than previously thought, falling 25 to 30 percent sequentially, vs. a prior forecast of 10 percent.
Things keep getting worse for Corning, as demand for large-screen LCD televisions sags in the face of a global consumer recession.
The LCD glass maker this morning said it is now withdrawing the financial guidance it provided just a few weeks ago for the fourth quarter and for 2009.
In a statement, CFO James Flaws said that “Panel makers, particularly those in Taiwan, have continued to reduce the utilization of their factories heading into the second half of this quarter in response to weakened retail demand for LCD televisions and desktop monitors.”
Shares of glass maker Corning (GLW), LCD panel producers AU Optronics (AUO) and LG Display (LPL) are all down sharply today amid a new wave of market jitters on the prospects for the flat-panel display market.
Several recent Street research reports note that conditions in the LCD panel sector have been difficult for much of the third quarter, raising questions about the companies’ ability to hit current Street estimates.
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