China may jack up LCD panel tariffs: sources

By Kim Young-gyo
HONG KONG, Aug. 30 (Yonhap) -- China may increase import duties for components used in manufacturing liquid crystal display (LCD) panels, industry sources here said Tuesday, a move expected to benefit domestic manufacturers.
The sources said that the Chinese authorities have been collecting input from the Chinese companies over raising import duties on LCD TV cells and modules. The process for making an LCD panel include assembling arrays, cells and modules.
The Chinese government could increase duties on 32-inch and larger LCD TV cells from 3 percent to 10 percent, and from 5 percent to 12 percent on those smaller than 32 inches, market researcher DisplaySearch said.
Market watchers say the move would likely have a huge impact on foreign LCD panel manufacturers as the cost of LCD panels comprises between 70-80 percent of the cost required to assemble an LCD TV set.
"From the perspective of local panel suppliers, higher import duties are good since they will force TV panel makers to buy more panels from domestic suppliers," said David Hsieh, vice president of the greater China market at DisplaySearch.
"For foreign suppliers, particularly ones like LG Display and Chimei Innolux who do not have solid plans to build a fab (or fabrication plant) in China, higher import duties will jeopardize their existing business in China," the executive said. "They will have to either force customers to absorb higher costs or sacrifice their own margins, possibly even take losses."