Innolux slows down 6G LCD plant project; CMO said to be doing the same

Rebecca Kuo, Tainan; Rodney Chan, DIGITIMES [Wednesday 16 July 2008]

An Innolux Display executive has disclosed that the company is cutting capacity for the first phase of its 6G LCD plant project because of a bleak market outlook, while sources with equipment suppliers claim that Chi Mei Optoelectronics (CMO) is considering slowing down expansion at its 6G line.

Innolux CFO Thomas Hsu pointed out that the original plan for the first-phase construction of the 6G plant was to ramp up the monthly capacity to 90,000 substrates by the end of 2009. But the company has lowered the goal to 60,000 substrates because of the widespread worries of oversupply in the panel industry in the first half of 2009, he revealed.

But there may still be changes depending on the actual market situations, Hsu added.

CMO originally planned to boost its 6G capacity to 80,000 substrates by the end of 2008, but sources with equipment suppliers said the maker is now considering delaying the ramp-up to 80,000 substrates to 2009.

But the sources said suppliers that have already started making preparations for 6G equipment in line with CMO's original plan are still studying how they may meet the client's new schedule. CMO's monthly capacity at its 6G line has already reached 50,000-60,000 substrates.

CMO has just decided to cut production by 10%, according to industry sources.

Ahead of its investors conference slated for July 31, CMO declined to comment on the report that it will cut its output or slow its 6G expansion. But it maintained that it is the company's "strategic goal" to not let inventories pile up