China-Korea FTA Affects Taiwan's Panel Competitiveness

Hon Hai Chairman Guo Tingming stated that the Sino-Korea FTA has an impact on the competitiveness of Taiwan’s panel industry and that the “negative” in the future will be anxious.

Terry Gou accepted an exclusive interview with TVBS TV's Fang Nianhua and talked about the impact of China-Korea FTA on the panel industry in Taiwan.

Terry Gou said that Hon Hai Group and individuals have invested in the 10th generation of factories in Osaka, Japan. The total output of the panel is already the third highest in the world, behind South Korea's Samsung and LG. Currently, there is a gap of only one year between Korean and Korean panel technology.

Globally, Terry Gou pointed out that currently South Korea, Japan, Taiwan, and China are actively deploying the panel industry. Korean manufacturers have advantages in large-size panels. Taiwanese factories are closely following, Hon Hai has led in middle-size panels, and the panel industry competes. Quite fierce.

Observing the panel industry, Terry Gou said that China's active deployment of the semiconductor industry and panel industry is to break the “lacking of the lack of cores” in the past. Currently, panel production capacity in mainland China has been gradually opened and the semiconductor industry has actively entered the semiconductor industry.

From the technical point of view, Terry Gou pointed out that South Korea’s Samsung is still leading the Taiwan new technology for one to two years, and Taiwan continues to catch up with South Korea in terms of panel mass production, development, materials, and equipment.

Regarding the impact of China-Korea FTAs, Gou said that the current panel gross margin is only 5% to 6% on average, and if it is increased to 7% to 8%, “we must work very hard”. If the China-Korea FTA allows the Korean panel tariffs to decline year by year, in the future, “there will be a difference” and there is an anxiety in the mind.

Terry Gou said that the trade and trade agreements between the two sides of the strait had not been signed first. As a result, the China-Korea FTA rushed to reach a consensus before Taiwan, which would cause panel customers to transfer purchase targets. "Orders may be transferred to South Korea," and "Customers demand price cuts." The pressure will come." Further, Taiwan's panel production capacity may be idle after next year.

Terry Gou pointed out: "Now we don't know if we have to expand the plant, we must upgrade, or we must move the panel plant to China, so that we can avoid the switch tax."

Looking forward to the cross-strait panel layout, Terry Gou stated that he will build a new panel plant at Kaohsiung Road in Taiwan, but the scale may differ from that of a plant in mainland China. If China-Korea FTA can eliminate tariffs on panels, consider cost and product competition. Due to factors such as price, the scale of investment in Taiwan may be reduced, and the scale of investment in mainland China may be expanded so as to avoid switch taxes.