Back in 2004, when selling CD-ROMs was still a lucrative business, BenQ Materials Corp. thought it was time to get out. In the years that followed, the technology became less mainstream, overtaken by everything from flash drives to online downloads.
Now, the Taiwanese electronics parts maker is doing it again. This time, it’s cutting back on a different cash cow: a component that it produces for liquid crystal displays. And it’s getting into parts for electric-vehicle batteries.
While BenQ is a small company, with a market value of just $199 million, and some might argue that getting out of CD-ROMs in 2004 wasn’t that prescient, its move is emblematic of the difficulties facing the industry.
LCD panels have been under pressure from the emergence of newer technologies such as OLED, with Apple Inc., for example, adopting those screens for some of its phones. A glut of Chinese supply is causing prices to slump as LCDs become commoditised. “Change is painful,” Z.C. Chen, BenQ’s chairman and CEO, said. But “I don’t see much room for this business to grow.”
BenQ discontinued CD-ROM production in 2011.
Chen’s move away from LCD parts comes as slumping prices deal a blow to the industry. Prices of 55-inch ultra high-definition LCD screens, for example, fell 4.8 percent in July as compared with the previous month, accelerating from an average 2 percent decline in the previous six months, according to data compiled by Witsview Technology. That comes as Chinese firms pump billions of dollars into building factories that churn out LCD panels for TVs.