I'm reading a material about touch panel sector. I don't understand the meaning of "switch profitability to utilization". I hope you can help me.
"There are concerns in the market that aggressive capacity expansion plans may result in oversupply and drag down touch suppliers' profitability. Indeed, the industry could see oversupply in 2011 if all suggested expansion is completed as scheduled; however, we don't see this as a real issue given that module (lamination) capacities are dominated by the industry leaders (particularly TPK and Wintek) and we see limited possibility for them to switch profitability to utilization, given they have secure orders and a light depreciation burden (single digit percentage of sales)."
My wild guess is that the industry leaders are not expected to expand capacity as much as that would hurt profitability.
Thank you!
Top answer
Do TPK and Wintek supply laminated modules to the other manufacturers who are planning to expand their finished product capacities?
— Avangi
Do TPK and Wintek supply laminated modules to the other manufacturers who are planning to expand their finished product capacities?
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