As China’s booming stock markets now finance Chinese tech startups, the competition between Taiwanese and Chinese manufacturers in the touchscreen industry is expected to become more heated and intense. According to Chinese-language news source Commercial Times, consumers will likely see these manufacturers battle it out through price wars.
Ever since the Chinese stock markets gave capital to local tech startups, Taiwanese supplies have suffered major financial losses.
"The touchscreen industry has been facing cutthroat price competition from the Chinese manufacturer," said Chiang Chao-jui, president of Taiwanese touch panel maker TPK.
Among the Taiwanese companies heavily affected by China's reenergized touchscreen manufacturers is TPK's subsidiary, Cando. In a shareholders meeting held on June 3, Cando reported major losses in 2014. To recover, Cando plans to sell its Hukou plant in Hsinchu for roughly NT$1.27 billion ($41 million) by the end of June. The company is also planning to raise investment of up to NT$500 million ($16.2 million), and to relocate future production to Central Taiwan Science Park for efficiency and savings.
General Interface Solution (GIS), a Hon Hai subsidiary, is also experiencing significant losses. The company made NT$1.34 billion ($43.4 million) in net profit last year, a 42-percent decrease from its net profit in 2013.
GIS is considered to be one of the major players in the touchscreen industry. Thanks to its ties with Hon Hai, the company was able to secure large orders from tech heavyweight Apple.
The Taiwanese touchscreen manufacturer will launch a primary listing on the Taiwan Stock Exchange (TWSE) this month.
They say that competition leads to progress, and the threat from Chinese touchscreen manufacturers has made their Taiwanese counterparts shift their focus to develop new technology and lower production costs at the same time.