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Another LCD Maker Cuts Back

July 27, 2006 | Author: Ibex Marketing

This week, AU Optronics (AUO) announced that it’s cutting back on its capital expenditure plans. Taiwan’s largest LCD manufacturer, AUO said that it will cut the expansion budget by about a third — from about $3 billion to $2 billion — and is postponing additional capacity on its Gen6 and Gen7.5 production lines.

Different manufacturers are responding to the current oversupply of LCD panels in different ways. LG.Philips LCD and AUO are two of the largest companies, and they are cutting back. Samsung is forging ahead, however, and Sharp has announced plans to build a Gen10 plant. It’s not at all clear who will be in a better position once the current excess inventory works its way through the channels.

The good news for buyers, however, is that prices will have to come down as a result of the glut, as everyone along the distribution chain will be anxious to convert this inventory into cash. September still looks like a good time to plan to shop.