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By | Austin Modine 14th February 2008 22:53

Lite-On factory fire threatens PC monitor biz

Dell, HP and Lenovo may get burned

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A fire at Lite-On's main flat-panel monitor factory in China could disrupt LCD display supplies across the PC industry.

Lite-On said a fire on February 3 at its plant in Dongguan caused estimated $71.2m in damages. In total, 14 of their 20 monitor production lines were affected by the blaze. No injuries were reported.

Lite-On is the world's fifth biggest maker of LCD monitors by revenue. Hewlett-Packard, Dell and Lenovo are customers.

Analyst Chris Connery at DisplaySearch notes on his blog that 22 per cent of HP's production of LCD monitors come from Lite-On; 20 per cent of Dell's; and 19 per cent of Lenovo's. Although the vendors often have the same monitor models fabricated by multiple OEMs, Connery believes a shortage could still have an impact on the monitor market.

"Dell has been losing share to stand-alone monitor brand Samsung for the past few quarters, and a disaster such as this could impact their worldwide share even more in the coming months," he writes.

The fire reportedly caused structural damage to the building, as well as damage to some equipment and stock.

Lite-On said its second-quarter results will reflect losses from the fire. LCD monitors make up the largest portion — more than 40 per cent — of Lite-On's overall revenues in past years. They expect damages to be fully covered by fire insurance, including losses that result from disruption of production, according to a Lite-On filing to the Taiwan Stock Exchange. ®

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