The fifth-generation LCD product line of SVA Electron launched on Oct 2004 has not reach its profit target due to changes in global markets. As a result, the integration of SVA, Jing Dongfang and Longteng Electron has not been accomplished.

The three parties have not signed an agreement as scheduled because of 'certain technical barriers'. Apparently, the recovery of the LCD market is a main factor for the lack of integration. According to Display Search, the LCD market will remain strong in 2008 and companies within the industry should not suffer any losses. Riding the recovery, SVA has launched a new LCD product line to maintain its competitive edge. Since the LCD market in China was opened up rather late, it was debatable whether a fifth-generation line would be introduced.

However, as the industry is characterised by high investment, technology and risk, the introduction of a fifth-generation line is the best choice considering both SVA's scientific and financial situation. In addition, SVA cannot ignore the fact that the capacity and market demand of the small panel market is approaching its saturation point.

In Dec 2005, SVA proposed the introduction of sixth-generation technology which failed due to lack of funds. On 14 Jan, both SVA Electron and SVA information suspended their fund raising for the sixth-generation line. Overall, the recovery of the LCD market in 2007 has enabled the three companies to turn losses into profits but has also led to the failure of their integration, leaving the three leading companies in the domestic LCD market back in their competitive positions.


Source: www.qq.com
24 Jan 2008

CN01/SW/BT/GB