Taiwan FPD Makers Poised to Integrate Development of Upstream Materials

Taipei, May 16, 2006 (CENS)--With a high local-content rate for key parts, Taiwan's flat panel display (FPD) industry is poised to accelerate integration of the development of upstream materials, according to David Hsieh, president of DisplaySearch Greater China.

Taiwan was the largest supply nation of large-size thin film transistor-liquid crystal display (TFT-LCD) panels in the fourth quarter of 2005 by shipment volume. Currently, the local-content rate of TFT-LCD key parts is quite high, industry sources pointed out, including such as 70% for glass substrates, 80% for color filters, 95% for backlight modules, and 100% for driver Ics.

According to industry experts, all of the top-five TFT-LCD panel makers in Taiwan are key members of the Taiwan FPD Material & Device Association and closely cooperate with the government-funded Industrial Technology Research Institute (ITRI) and different enterprises to in developing new materials and key parts. Their major goal is, they added, to further upgrade the local-content rate of key materials.

Hsieh pointed out that fierce competition in Taiwan's TFT-LCD key-parts sector have eased, but increasingly fierce competition is looming in the upstream material sector now. The regional president is very optimistic about the development of TFT-related materials in Taiwan, because the island already owns solid infrastructures in metal, petrochemical and plastic industries.

Under increasing cost pressure, Hsieh continued, local panel suppliers are actively undertaking vertical integration in key parts, and especially upstream materials. Hsieh forecasted that the next target of integration by local panel makers would be the optical-film materials.

Hsieh suggested upstream panel-material makers adjust their operation directions, turning their traditional capacity-expansion competition mode into technical and management momentum. In the future, Hsieh said, only companies that control key techniques and know-how could win orders.