Gov' t to Upgrade TFT-LCD Equipment Local-content Rate to 50%

Taipei, March 20, 2006 (CENS)--Taiwan' s Executive Yuan (Cabinet) recently listed cultivating local talent and increasing local content ratio as the two major goals for the thin film transistor-liquid crystal display (TFT-LCD) panel industry in Taiwan.

The Executive Yuan targets to boost local content ratio of panel-production equipment to 50% from the current 10%, which is expected to further enhance the vertical integration in the local panel industry.

The government plans to provide guidance for major makers of precision machinery—such as computer numeric control (CNC) machining centers—in the Taichung Precision Machinery R&D Industrial Park, so that they will be able to diversify into panel-manufacturing equipment and more closely cooperate with TFT-LCD panel makers in the neighboring Central Taiwan Science Park (CTSP). Such integration is expected to form a more comprehensive industry cluster in central Taiwan.

Lin Ferng-ching, Minister without Portfolio at the Executive Yuan and former chairman of the Institute for Information Industry, pointed out that both the "Two Trillion N.T. Dollar Industries" (the TFT-LCD panel and semiconductor industries) in Taiwan have encountered problems such as their low level of raw-material independence and the low local-content ratio of their manufacturing equipment, which have thinned profit margins in the two lines.

Taiwan has become one of the world's most important TFT-LCD panel production bases, Lin said. Therefore, panel makers have to evaluate merger possibilities for higher competitiveness, while the government has to cultivate more talented professionals to meet the strong demands from the line.