FLAT PANEL DISPLAY
UPDATE
May 2008
McIlvaine Company
TABLE OF CONTENTS
Tianma – TFT Reaches 80 Percent Capacity
BOE Plans for More after 4.5G Facility
Reports Say That China’s Earthquake Has Little Effect on BOE or Changhong
CMO 6G Line Ramping Up Production
Chunghwa Picture Tubes Plans 6G Plant
Sony Plans LCD Plant in Slovakia
Carlyle Buyout of Hoya and Nippon
Chi Mei Optoelectronics (CMO) Plans LCD Plant in Vietnam
The capacity utilization rate of the 4.5-generation (4.5G) TFT LCD plant of China-based flat panel maker Shanghai Tianma Microelectronics has reached 80 percent after the plant entered volume production in March this year, according to company sources.
Tianma's 4.5G plant has a monthly capacity of 30,000 units and focuses on small- to medium-size panels for handsets and PDAs.
While the company currently produces 7-inch TFT LCD panels for digital photo frames as its largest panels, Tianma is scheduled to produce 10.2-inch panels in the near future.
BOE officially announced the ground breaking at its 4.5G TFT LCD line in Chengdu, Sichuan Province, with the plant involving a total investment of 3.1 billion RMB. Mass production is expected in the second quarter 2009.
While China-based LCD panel maker BOE Technology is currently setting up a 4.5G production line in Chengdu, Sichuan Province, industry sources noted that the panel maker may set up another 4.5G production line in Changsha, Hunan Province.
The LCD plant is located at Tangjeong an hour out of Seoul, it employs 6,000 directly and 5,000 in affiliate industries – this could rise to 50,000 by the time the site is completed in 2015.
Huge 200m lines take the work and the company is currently constructing the $2 billion second phase of its eighth-generation line to produce its largest LCD screens. Two more lines are being planned, with land allocated for three more.
The lines are a joint venture (dubbed S-LCD) between Samsung and Sony, who use the panels in their TVs. The new line will produce 60,000 sheets measuring 2.2 x 2.5 meters a month according to Samsung.
That’s in addition to 100,000 smaller sheets on the seventh generation line and 50,000 on the existing eighth generation line. It’s a mind-blowing operation.
China's LCD panel industry, whose facilities are mostly located in the southern and eastern parts of the country, is unlikely to see its production affected by the strong earthquake that hit the southwest part of Sichuan province, market observers have said.
China-based display players that run operations include Sichuan Changhong Electric and BOE Technology Group.
Changhong has recently announced a plan to invest US$100 million to build China's first OLED panel plant in Chengdu, the capital of Sichuan province, with production ramp-up scheduled for the first quarter of 2009.
BOE has recently kicked off construction of its 4.5G TFT LCD plant in Chengdu, with volume production expected in the first quarter of 2009, the market observers noted.
David Hsieh, DisplaySearch's vice president for the Greater China market, said he had contacted Changhong, which said its operations had not been much affected by the quake.
Short-term demand for TVs in China may be dampened, as Sichuan has a population of 100 million people, the observers said. But demand for TVs may pick up when people start rebuilding their homes there, the observers added.
Chi Mei Optoelectronics (CMO) is seeing its sixth-generation (6G) LCD panel line fast ramping up production, with output expected to reach 20,000-30,000 substrates in May, compared to over 10,000 substrates in April.
CMO was cited as saying that as expansion of the 6G line is running ahead of schedule, the fab is expected to reach its full capacity of 90,000 substrates per month in the first quarter of 2009. The 6G line currently rolls out applications for the 26-inch segment, but it will later also add the 32-inch segment to its product portfolio in the future.
Chunghwa Picture Tubes (CPT) announced that it has secured a NT$4 billion (US$130 million) syndicated bank loan to fund the second-stage construction of its 6G color filter (CF) plant.
CPT said it has been gearing up for vertical integration, having invested in driver IC designer Sitronix Technology, cold cathode fluorescent lamp (CCFL) supplier Sintronic Technology, small- to medium-size LCD module (LCM) maker Giantplus Technology, and China-based TV maker Xiamen Overseas Chinese Electronic (Xoceco).
The company noted that it has recently agreed to buy two of Sintek Photronic's CF plants (one 3.5G and one 4G). It said the completion of the 6G CF plant will help drive its growth.
China's first sixth-generation LCD production line is likely to settle down in Hefei, the capital city of central Anhui Province.
The local government is discussing the project with related parties, which is predicted to have a total investment exceeding CNY 10 billion.
Thus, Hefei will be able to produce LCD panels ranging from 32 inch to 37 inch, and become the exclusive supplier of large-screen LCD products in China.
As necessary materials for the production of many electronic consumer products, LCD panels are widely used in manufacturing TVs, mobile phones, computers, and digital cameras. However, due to limitation in technologies, Chinese companies are unable to produce LCD panels larger than 32 inch, which are mostly supplied by foreign electronic giants like Sharp Corporation, Samsung, and LG. Homemade LCD TVs fall behind first-tier foreign brands in prices, profits, and international competitiveness.
LCD TVs are thin, light, and have long use lives, with high definition and no radiation, so are very popular among customers, and sold at high prices. The LCD project will not only have a large growing space, but also trigger a fast growth of supporting industries.
Sony has revealed plans to double its capacity for liquid crystal display televisions in Slovakia – good news for plastic part suppliers that set up plants there on the coat tails of the electrical giant.
Sony Slovakia Spol will expand the capacity of its plant in Nitra, where it will make Bravia 14m LCD TVs per year by the end of 2008, making it the company’s biggest such facility worldwide.
The project also calls for Sony to increase the plant’s workforce by 50% from 2,300 to 3,500 by the end of this year.
Two plastic component suppliers that have set up production in Nitra in support of Sony are injection moulder Ryoka Kogyo of Tokyo, and Seoul, South Korea-based moulder Daidong Electronic.
Ryoka Kogyo invested $9.8m (€6.3m) to establish its Ryoka Global Europe injection moulding unit on a one million-square-foot site in Nitra. It launched its facility early in 2007, installing nine Mitsubishi injection presses with clamping forces of 650-1,450 tons. It also has part-painting facilities.
Ryoka Kogyo supplies Sony with housings for TVs, as well as DVD and computer equipment. It also produces parts for Hitachi TVs, components for office equipment for Canon and Nisca and medical devices for Nippon Becton Dickinson.
Daidong Electronics invested $6.3m (€4.1m) overall to set up its plant in Nitra. The company, which already has a moulding unit in Havan, Hungary, with 20 presses, is set to launch its local operation when the unit is complete in June. It will employ 100.
Sony, which began LCD TV manufacturing in Slovakia at Trnava in April 2006, soon realized it had little space to expand there. In 2007, it built its Nitra technology center to meet the rapid rise in regional LCD TV demand. Sony has relocated Slovakian production there.
In addition to Nitra, Bravia TVs are manufactured in Barcelona, Spain.
The company is also building a logistics centre that will open this fall to manage TV distribution. The logistics centre is next to the Nitra technology center, which will become the main hub for Sony’s pan-European TV business.
U.S. private equity firm The Carlyle Group will lead a 58.1 billion yen ($560 million) management buyout of an LCD glass venture jointly owned by Japan's Hoya Corp and Nippon Sheet Glass.
Under the agreement, Nippon Sheet Glass would unload its 50 percent stake in the venture, NH Techno Glass Corp, to a special-purpose vehicle set up by Carlyle for 40.6 billion yen, while Hoya would sell a 21.5 percent stake for 17.5 billion yen.
The vehicle would merge with NH Techno Glass in late September, resulting in Hoya holding 47.4 percent in the new entity. Carlyle would hold 52.6 percent.
Reuters reported in late-February that Carlyle was the preferred bidder for the glass venture.
NH Techno Glass faces increasing price competition from bigger rivals, who can invest in new equipment and benefit from economies of scale.
Carlyle and Hoya plan to expand the venture's manufacturing facilities overseas and aim for an initial public offering, the two said in a release.
Hoya said it would book a special profit of 10.4 billion yen in the April-June quarter on the sale of the stake, while Nippon Sheet Glass would book a 25 billion yen special profit on a consolidated basis in the year started April.
NH Techno Glass competes with Corning Inc, Asahi Glass Co Ltd and Nippon Electric Glass Co Ltd which together dominate the market for glass used to make LCD panels ($1=103.75 yen).
Qualcomm MEMS Technologies, a wholly owned subsidiary of Qualcomm Incorporated and Foxlink (Cheng Uei Precision Industry) a developer and manufacturer of communications devices, computers and consumer electronics, today announced an agreement to bring a new, dedicated fabrication plant to Lungtan's Science Park in Taoyuan, Taiwan to manufacture Qualcomm's next generation Mirasol displays. The fabrication plant is slated to be fully operational in 2009.
In support of the effort, Foxlink has created a new business unit to support the production of Qualcomm MEMS Technologies' Mirasol displays. Foxlink currently employs a workforce of more than 43,000 employees and operates more than 15 design manufacturing and sales sites worldwide.
Based on a reflective technology called interferometric modulation (IMOD), Mirasol displays harness ambient light and require no backlighting, thereby consuming significantly less power. The reflective Mirasol display also automatically scales to the surrounding lighting conditions, allowing users to see their content in almost every environment, even bright sunlight.
Chi Mei Optoelectronics (CMO) has confirmed it is planning to set up an LCD module (LCM) plant in Vietnam in a production cluster of Taiwan-based companies that include Wistron.
CMO president Jau-Yang Ho revealed that the company is now working with Wistron and other Taiwan-based firms to prepare land in Hanoi needed for the production facilities. Construction of the LCM plant is expected to begin in the second half of this year.
However, Ho said CMO is yet to finalize the sum of investment, production capacity, or construction schedule for the Hanoi plant, which will mainly make LCMs for monitor and notebook applications.
Ho explained that CMO is setting up the plant in Vietnam because the land that the Vietnamese government has allocated for Taiwan companies is quite good, and labor costs are lower compared to China.
CMO has been offered 200 hectares of land out of a 500-hectare plot the Vietnamese government has allocated for Taiwan companies.
In response to a plan of competitor AU Optronics (AUO) to build production facilities in Europe, Ho said CMO is still assessing the possibility of also doing so, with a decision likely some time this year.
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