China's New Program to Benefit Taiwanese Home-Appliances Firms Further
China's "home appliances for urban areas" program will be an even greater boon than the "home appliances for rural areas" program for Taiwanese suppliers, as the former will stimulate demand for large-sized high-end models, different from the demand for entry-level models for the latter, said K.Y. Lee, chairman of BenQ-AU Optronics Group on May 24th.
During a training program for senior managerial staffers of the group, Lee remarked that the new program will induce replacement demands in the nine urban regions it covers, including Beijing, Shanghai, and Jiangsu, which boast the strongest consumption power in the country, prompting their residents to forgo their conservative attitude amid the economic slowdown and purchase new products.
The new program will further boost demand for flat panel displays, benefiting AU Optotronics and a number of other subsidiaries of the group, such as Raydium Semiconductor and Daxon, as well as that for finished products, a good news for BenQ, which as a production base in Jiangsu supplying PC and LCD TV to rich coastal regions.
Already demand generated by the "home appliances for rural areas" program has been overstraining the capacity of AU Optronics, whose shipment of TV panels in the Chinese market is expected to double or even triple this year. Lee pointed out that the ripple effect of the program has spread throughout the entire supply chain.
Industry insiders noted that the "home appliances for rural areas" program has greatly helped Taiwanese TV and PC suppliers cope with the onset of global market decline since the second half of 2008.
The program has not only boosted the capacity utilization rate of Taiwanese FPD suppliers but also augmented FPD prices by US$10-15, prolonging the time for order delivery to over one month for some suppliers.