Makers of LCD panels in China undertake expansion to target large-screen applications.
LCD panel manufacture in China will continue to grow as more local and foreign panel makers step up to high-generation products, going beyond 6G fabrication plants.
The largest manufacturing hub for LCD TVs, the country accounts for about 50 percent of the world’s aggregate output. From January to September 2010 alone, its yield surged by 29 percent YoY to 58.9 million units. An additional impetus for display suppliers is LCD TVs’ expected further rise in global shipments, with annual rate reaching 13 percent this year. By volume, this translates to 215 million units from 190 million in 2010, according to DisplaySearch.
In the next two years, mainland China will have a tripartite LCD panel sector, comprising domestic, South Korea and Taiwan ventures. Its capacity for 32in and larger sizes will post an 80 percent CAGR in 2010-13 based on estimates by Digitimes. When all the high-generation facilities realize mass production level, output will have about 16 percent share of the global total by next year. At present, the mainland remains heavily dependent on imported panels.
BOE Optoelectronics Technology Ltd’s 8.5G LCD production line completed in July 2010 is expected to commence operation in 2Q11 and go full steam in the third quarter.
A similar unit of China Star Optoelectronics Technology, a subsidiary of TCL, will start trial manufacture in August and enter mass scale in 4Q11. Its capacity for large panels will be mainly used to fill TCL’s requirement. By the end of next year, the facility will be able to churn out 100,000 glass substrates monthly.
The world’s top two LCD panel makers, Samsung and LG Display, meanwhile, were granted approval by the China government in November 2010 to build plants. The first will establish a joint venture to construct a 7.5G unit in Suzhou, Jiangsu province. The project will cost nearly $2.3 billion.
LG Display will do the same for an 8G plant in Guangdong province’s Guangzhou. It will invest about $4 billion. A 7.5G facility can churn out panels bigger than 40in and 8G exceeding 50in.
AU Optronics received the formal approval from the Investment Commission of the Ministry of Economic Affairs in December last year to erect a 7.5G fab worth $3 billion. The undertaking represents Taiwan’s move to ease restrictions on the exportation of protected technologies amid strong competition from South Korea.
Meanwhile, the mainland LCD suppliers are keeping up with the trend for LED backlight, adopting it to take advantage of the sliding cost of modules. The next technology in large-area displays, diodes are expected to surpass mainstream CCFL this year. They will account for approximately 67 percent of such displays worldwide, jumping from 44 percent in 2010, according to iSuppli. In shipments, this translates to 495.6 million units by year-end, up from 283.3 million units in the previous period.
In terms of applications, the global penetration rate in monitors and TVs has grown from about 20 percent in 2010 to nearly 50 percent. The boost comes from panel makers’ efforts to upgrade their LCD module production lines for LED. AU Optronics, for instance, will convert its lines for monitors and TVs next year and 2013, respectively.
In LCD TV modules, the diode’s share reached 26 percent based on DisplaySearch’s 3Q10 report. Many local suppliers, however, believe it was higher in China because of the adoption in LCD TVs smaller than 32in. They attribute this to the price factor. “Now, there is no big difference in such models. The gap is about $10, and with the drop in LED module costs, it is getting narrower,” said Makena Electronic (Shenzhen) Co. Ltd’s Jared Wu. Eighty to 90 percent of the supplier’s LCD TVs in the size range are LED-backlit. It is the same for the majority of TV exporters.
For TVs above 32in, the cost disparity between LED and CCFL remains high at $80 to $100, or even greater in sizes exceeding 46in. To reduce outlay, most China TV companies use edge diode lighting, which is less expensive than the direct type. For the long term, they are building upstream supply chain to control costs better.
Makena has completed a module assembly workshop recently and is currently turning out small batches. The target yield is 26in and larger.
In the computer terminals sector, particularly laptops and netbooks, China makers’ switch will be 100 percent in the months ahead from about 90 percent last year. This is because upstream panel and LCD module companies have shifted mass production focus from CCFL to the diode-based backlight.
“In 2009 when LED adoption began, only 20 percent of our laptops are based on diode-backlit LCD modules. The situation reversed totally in 2010. Now, we are providing more than 90 percent of laptop models and 100 percent of netbooks with LED-illuminated screens,”said Jim Yu, sales director of Shenzhen Hasee Computer Co. Ltd. “Other China suppliers have a similar situation.”
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