Following its investment in China-based TV maker Xiamen Overseas Chinese Electronics (Xoceco) last September, Chunghwa Picture Tubes (CPT) is now planning to extend its influence over Konka, another China-based TV maker.
Konka is already a customer of CPT and top-level executives from Konka recently visited CPT to discuss a potential partnership. Since CPT has already placed investment in Xoceco, the panel maker has to consider how to manage the investment in the meantime. Also, given the rapid price falls of LCD TV panels, CPT plans to assign more capacity at its sixth-generation (6G) LCD panel line for monitor panels, especially wide-screen models, so production allocation would be another factor in judging the possibility of a partnership.
CPT plans to have a monthly capacity of 90,000 substrates at its 6G plant from the second quarter of 2007. One-third of the planned capacity will be assigned to LCD TV panel production, while the remainder will be for monitor panel production.
Although there are still many aspects CPT must consider before making a move with Konka, such a partnership would deliver favorable prospects for CPT. According to statistics from the China-based State Information Center, flat-screen TV sales of 4.77 million units accounted for 13.6% of TV sales in China in 2006. It is estimated that flat-screen TV sales will rocket 80% in 2007 with sales of LCD TVs reaching six million units.
The performance of Konka in China is remarkable. According to Konka, it grabbed almost 15% of the LCD TV market in China in 2006. The company sold about 600,000 LCD TVs in China and another 400,000 overseas last year. The company projects its LCD TV sales will hit two million units in 2007, with the amount split evenly between China and overseas markets.
In addition to the mentioned market size and substantial business potential from Konka, CPT also regards the strengthened ties with China-based vendors as one of its deployment strategies. By merging with Konka, CPT would effectively guarantee another channel for its LCD TV panel sales.