Chi Mei Opto Electronics

Brief accession Chi-mei Optoelectronics (CMO) is a world- leading(a) manufacturer of TFT-liquid crystal display display control panels for use in applications such as setting monitors, notebook PCs, and liquid crystal display TVs. The company was founded on August 6, 1998 and was listed on the Taiwan Stock Exchange (stock symbol 3009) in August 2002. As of early 2006, CMO had over 15,000 employees ecumenical. CMO has long cultivated its base at the Tainan Science-Based industrial Park, where it currently operates four convergenceion facilities including one 3. 5- propagation mythical, one fourth-generation fab, one fifth-generation fab and one 5. -generation fab. To primary(prenominal)tain a high level of warringness and flexibility, CMO is down(p) in its investment activities and has aggressive plans for the deployment of its next-generation plants. In addition to capacity enlargement plans for its current facilities, CMO is in the functioning of building its second fifth- generation fab, and a brand- untested 7. 5generation fab. With its commitment and heavy R&D focus on the highest forest of in-house self-developed technologies, CMO is able to attract the most brilliant TFT-LCD R&D endowment fund in the industry.In addition to ongoing innovation in production process technologies, CMO strives to satisfy consumer quests and containations for high choice LCD panels by continually qualification technology breakthroughs and refinements. CMO is in like manner dedicated to facilitating the clustering of the Optoelectronics Industry, and has put tremendous endeavour towards vertical integration with its suppliers. CMO has brought together leading upstream suppliers, including seducers of glass substrates, backlight units, polarizing films, gelid cathode fluorescent lamps and driver integrated circuits.CMO also initiated the Optoelectronics manufacturing cluster in shoetree Valley (previously known as the LCDTV & Industrial Support Park), and ha s been ahead of the curl in localizing the procurement of headstone components and equipment to enhance supply chain efficiency. This in turn has significantly stimulated the upgrade and development of Taiwans innovative Optoelectronics Industry. The world is currently entering a new fortunate era of high definition digital TV and multimedia.As one of the leading manufacturers in the global LCD-TV panel industry, CMO extends to focus on the development of forward-looking technology and innovative products, and characters in the responsibilities of promoting the knowledge-based concept of the digital home. pop off year, CMO organized the 2005 Digital TV Technology Forum in which giving medication representatives and experts from around the world were invited to share their experiences and visions on the future of the digital home.We at CMO believe it is our duty and obligation to satisfy our clients needs and expectations with high quality displays, and to enhance Taiwans pre sence in the worlds TFT LCD display industry. Corporate Structure Business Performance 2005 summons Results In 2005, CMOs panel production set another historic record. Annual panel commitment increased by 90% to 23,685 deoxyguanosine monophosphate units, while yearbook revenue increased by 49% to NT$152, 844 gazillion. internet profit amounted to NT$ 8,047 million. Revenue from LCD-TV panels contributed over 40% of annual bar grows, with an annual shipment of more than than than 5. million units. Our annual capital expenditure was NT$ 62,018 million. Operation Strategies We expect that the China food market will play a very all important(p) role in our global operation strategies. Therefore, we established Ningbo Chi Mei Optoelectronics in the second half of 2005, which was a very important freshman step to implement CMOs global operation and damage step-down strategies. More importantly, Ningbo Chi Me Optoelectronics, as our first investment in China, also builds a st ronger base for the long-term development of CMO in this militant TFT-LCD industry.Also, to stand high quality customer gain and maintain close customer relationships, CMO established two new subsidiaries, one each in europium and Singapore. Additionally, CMO will invest more sharp in the technologies of various line input components to protect our company from potential industry-wide shortages. 2006 Operational Goals Buoyed by the anticipate strong replacement demand and imminent emergence of digital life, the worldwide TFT-LCD market is forecasted to experience strong growth and profits in 2006.To settle our position as a leading manufacturer of LCD-TV panels, we will hang in expanding our production capacity through the peck production and ramp up of our second 5G Fab and Ningbo Chi Mei module assembly plant, as well as achieving higher yields at the 5. 5G Fab and the equipment move-in of the 7. 5G Fab. Meanwhile,CMO will aggressively invest in the market of key input com ponents to achieve cost reductions in an efficient manner. For 2006, with all our empolyees efforts and innovations, we have confidence in memory our position as a leading manufacturer of LCD-TV panels.In addition, we will continue to strive for higher market share in the notebook computers and desktop monitors markets. Operational Highlights Business Activities CMOs scope of business includes the research, development, production and sale of TFT-LCD display panels and color filters. 2005 Sales Chart Industry overview ascribable to the tyrannical technology, modify applications and cost effectiveness, TFT-LCD monitors has become the mainstream product in the flat panel display industry in recent years.In 2005, the suppliers of the key components such as backlights, color filters, driver ICs, and polarizers benefited greatly from the strong demand generated by the mass production of next-generation TFT-LCD fabs. According to DisplaySearch, Taiwans share of worldwide LCD TV panel revenues grew dramatically from 27. 4% in 2004 to 38. 7% in 2005. TFT-LCD is a capital-intensive and technology-intensive industry. The main countries include Taiwan, Korea and Japan. In 2005, LCD TV panels bloomed imputable to the smooth mass production and ramp up of worldwide ifth generation and above fabs. According to DisplaySearch, the production of LCD TV panels increased to 28 million units in 2005 from 8 million units in 2004. In the past, the main manufacturers focused on competing for higher production capacity. Now, in order to gain better positioning in the future LCD TV market, the key players are paying more attention to accurate demand predictions, ductile production, and new advanced technologies. Also, the price fluctuations of LCD TV panels have smoothed out compared to before 2005.The following chart is an overview of the TFT-LCD industry R & D Expenditures Short and Long Term Operating Development Plan In 2006, CMO will continuously strive to capture a higher market share in the TFT LCD market and provide more diversified products A. LCD-TV Product CMO will continuously improve our market shares and revenues in this market. Due to the strong demand for LCD TVs, we will offer an extensive product line of full HD panels above 40 to fulfill the demands of our clients.Based on our firm worldwide customer base, CMO will continue to improve the operation operation in each area. Also, CMO will more aggressively explore new business opportunities in developing countries. B. OA Product In 2006, CMO expects to capture 1 to 2% more market share than last year in the desktop monitor and notebook applications. We will offer more competitive wide-format products, and develop 22, 24 and 30 panels for the monitor segment. Also, we will bring on notebook panels in our fifth generation fab, which will improve our competitive advantage as well.In 2006, CMO will not only offer more diversified products, but also continuously provide our customers with be tter service and cooperation in order to achieve higher a market share in the TFT-LCD industry. Industry growth forecast DisplaySearch has forecasted the large-sized TFT LCD panel demand in 2006 to consist of 7. 86 million units for notebook computers and 135 million units desktop computer monitors (11. 6 million units for other applications), with respective annual growth rates expected to be 24% and 14%. We produce notebook panels in our 3. , fourth and fifth generation fabs, which can economically cut sizes such as 12. 1, 13. 3wide, 14. 1 and 14. 1wide, 15and 15. 4wide, and 17wide. Monitor panels are produced in our fourth, fifth, and 5. 5 generation fabs, which have economic cutting sizes for 17, 19, 20. 1, 19 wide, 22wide and 24 wide format. CMOs merchandising division expects the LCD TV panel market will strike approximately 43 million units with an annual growth rate of 54% in 2006. More importantly, 32 and above panels will account for more than 40% of the total market.We h ave strengthened our position in the 20 and above LCD TV market in the past 3 years. Our annual LCD TV panel shipment is more than 5. 5 million units in 2005. CMOs market share in LCD TVs is on par with the two Korean manufacturers. Our innovative technologies and products have enabled CMO to submit significant advances. Manufacturing Process Sales and Production over the last 2 years Domestic and Export Sales over the last 2 years Financial Analysis of the Last Five Years loose Sales Breakdown by Application Sales Breakdown by Application Unconsolidated Sales Breakdown by Panel surface Sales Breakdown by Panel Size