Home » Reflectivity/Sunlight readability » Shrinking capital investment in the worldwide LCD industry

Shrinking capital investment in the worldwide LCD industry

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Updates: Samsung board approves LCD business spin-off [Feb 21, 2012]

Samsung Electronics has announced that plans to spin off the company’s LCD display business have been approved by its board of directors. The new body will be 100%-held by Samsung, concentrating on developing future display technologies such as OLEDs.

The display market is undergoing rapid chances with OLED panels expected to fast replace LCD panels to become the mainstream. Amid this structural change of the display industry, adopting measures for change and innovation, including business restructuring, are essential to improve our competitiveness for our display business,” Samsung said in a statement.

The spin-off is scheduled to take effect on April 1, 2012, subject to approval by company shareholders, according to Samsung.

Samsung indicated that running its LCD unit separately will also allow it to make investment and other business decisions efficiently, while strengthening its technological capability and competitiveness.

Tentatively named Samsung Display Company, the new company will be built with paid-in capital of KRW750 billion (US$667.8 million), Samsung disclosed. Going forward, the entity will consider adopting various restructuring measures including a merger with Samsung Mobile Display (SMD) and S-LCD, Samsung indicated.

Samsung’s display panel unit – including its LCD business and subsidiary SMD – reported KRW750 billion [US$667.8 million] in operating losses for 2011, while its other businesses stayed profitable. The firm saw its overall operating profits slip 6% to KRW16.25 trillion [US$14.5 billion] in 2011.

Samsung also makes memory chips and mobile phones.

Samsung to invest more into display technologies [Feb 15, 2012]

Industry sources indicated that Samsung Electronics continues to expand its TV product lines and is aiming for smart TV shipments to reach 50 million units in 2012. In particular, Samsung may invest up to KRW6.6 trillion (US$5.9 billion) into LCD display products.

LG also plans to introduce OLED TV products at the end of 2012. The market believes LG will adopt white OLED display technology.

Industry sources noted that Samsung will likely focus on producing OLED TVs after merging Samsung Mobile Display into the group.

Taiwan-based panel maker AU Optronics (AUO) also has OLED technology. However, the firm indicated that large-size OLED panels will only be produced in small amounts. The firm will focus its OLED technology towards small- and medium-size products such as smartphones and tablet PCs. AUO showcased a 32-inch OLED TV at the end of 2011.

AUO added that yields from producing large-size OLED panels continues to be a problem. Currently, the price of OLED TVs is still quite high. Taiwan-based TV brands believe that low-priced models will continue to take over the TV market in 2012, hence it is unlikely for consumers to try out OLED TVs while the price is still high.

China government reportedly plans to raise import tariffs for LCD panels [Feb 6, 2012]

The China government plans to raise import tariffs for LCD panels by 3-5% in the second quarter of 2012 in order to safeguard the development of the domestic flat panel industry, according to industry sources.

While acknowledging the speculation, most Taiwan-based panel makers stated that they have not heard any official announcement from the China government and expect the new tariff policy to become more clear in May.

If the new tariffs are realized, China-based flat panel makers BOE Technology and China Star Optoelectronics Technology (CSOT) will benefit from the adjustment as the two companies are ready to ramp up their output this year, the sources commented.

The possibility is high for the China government to raise tariffs for LCD panels at a time when its 8.5G lines begin volume production and domestic 10G lines have gradually been established, Jason Hsuan, chairman of TPV Technology, said earlier.

See also the updates as of January 4, 2012 in the ending part of this post.
End of updates

Digitimes Research: Samsung may cut LCD panel orders for Taiwan after Sony exit from S-LCD [Jan 2, 2012]

Sony has been cooperating with Samsung Electronics on the TFT LCD business since 2004 when the Japan vendor was optimistic about the growth of the LCD TV market. Large-size panel makers in general were able to achieve gross margin of 20% and some even had 35% in the period between second-half 2003 and first-half 2004. This further hardened Sony’s determination to invest in large-size LCD TV panel production, forming a joint venture, S-LCD, with Samsung in April 2004.

But the price of LCD TVs and related panels have been dropping rapidly and growth of the market is also slowing down. Accumulated loss for Sony’s TV business unit has reached JPY650 billion (US$8.4 billion) since 2003. Hence, lowering the cost of procuring panels and the cost of running S-LCD has become a priority.

Due to the loss incurred by the TV business unit and the rising popularity of smartphones, Sony decided to buy back all shares of Sony Ericsson to expand its own smartphone department, but at the same time exit the cooperation in S-LCD. The departure from S-LCD can help Sony decrease losses and obtain a certain amount of cash.

Taiwan firms have seen Japan vendors such as Sharp, Panasonic, Toshiba and Sony increase panel procurement and TV orders. Sony may now decrease the amount of panel procurement from Samsung, and rely even more on Taiwan suppliers. As for Samsung, it is possible that it may move one of S-LCD’s 8.5G production lines to Suzhou, China to avoid tariffs.

Samsung is the world’s largest LCD TV vendor. In 2011, about 40% of its TVs used LCD panels from AU Optronics (AUO) or Chimei Innolux (CMI). So once Sony decreases the amount of panel procurement from Samsung, it is predictable that Samsung will decrease the number of panels procured from Taiwan-based panel makers. Therefore, Sony’s exit of S-LCD cooperation is not completely beneficial to Taiwan-based firms.

Reinvent the display–again [Dec 27, 2011]

By Mary Lou Jepsen, Founder and CEO, Pixel Qi (as told to Barb Darrow)

Mary Lou Jepsen could be called the queen of screens. Her pioneering work on computer displays took her from graduate studies in holography at MIT and optical science at Brown to MicroDisplay to Intel to One Laptop Per Child. Today, she is the founder and CEO of PixelQI, where she works on creating energy-stingy, bright, and lightweight screens for laptops and smaller devices, including phones. In her view, the screens are not an after thought, they are key to the user experience.

The LCD industry is in meltdown. The losses are huge and have been for the last five years or so. It’s unclear how some of the large companies are going to make it through.

The recession’s different in the hardware industry. I think it’s much worse today than in 2008 and early 2009. For the tier one companies, it’s not about the hardware anymore. It’s abouthardware, software, content. And content suppliers are king right now. A lot of the hardware suppliers won’t survive unless they restructure. It’s a bit like the airline industry. Many of the airlines we fly are bankrupt. We’re dealing with that kind of scenario. They all make the same products and compete on price. You can only do that for a number of years before the consequences get worse and worse. E-ink stands alone, as a category that is doing relatively well.

In 2011, it became apparent to the executives that they need to do something different. That made our life easier at PixelQI. Now we can get into the factories. Before it was a struggle, with us trying to say, “We know more about designing an LCD than you do.” They’d look at us and say, “How many people are you? We’ve got 50,000 people. Where’s your fab? How many engineers do you have?” For me to say, “Well, my engineers have Ph.D.s from MIT and Stanford” — they don’t care about that.

Over the course of our company’s life, we’ve shipped three million units, including the One Laptop Per Child units. No one’s ever done that before for a novel display company. It usually takes decades. We’ve shown our stuff can be mass-produced in volume and deal with the price structure inside existing factories.

We may move into the cell phone space next year, but for that we need to demonstrate volume in multiple fabs, because the volume in cell phones is so large.

One challenge for next year is whether the industry, our customers, find an interesting tablet that isn’t just like the iPad but cheaper. Certainly Amazon is making a go of it. The competitive landscape has been tough on our big customers, the ones in Best Buy who compete with Apple. There are a lot of products that haven’t made it.

We’re also working on some displays that will be rollable, flexible, put anywhere displays, and look better than OLED and don’t need power cables or data cables. That’s pretty cool, because then you can solve some problems in portable computing. With rollable displays you can look at more data. You can write notes in one area and view things in other areas. Digital signage needs it. TV needs it.

LCD is a bit like low-end DRAM these days and it doesn’t have to be. There’s so much more we can do to use it like we use DCMOS. With what we’re doing, we’ll show you that you don’t need batteries. Or it might be more like a watch where you might change a small battery.

I’ve also been thinking about the way we perceive images. When you see something really striking, it feels like it’s burnt on your retina. There’s some data that suggests that it kind of is. Not the retina exactly, but right behind it, on the LGN [lateral geniculate nucleus]. There’s research that shows that it’s possible to extract that information, suck it out. Two thirds of our brainpower is allocated to processing visual images. What are they? Do they look like what we think they are? Can we get those out to people? How will communication change? Will it be better, worse? Will it shock people? In the ultimate future of display technology, there is no display. We will communicate with images that are in our minds already.

Mary Lou Jepsen of Pixel Qi at TEDxTaipei [May 9, 2011]

You have to consider, while it has been 23 months ago that I [i.e. Charbax] published my first Pixel Qi interviews from Taiwan (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14) while that might sound like a long time, in the display industry, 2 years is peanuts. Things move rather slowly there. Since then, there has been an economic crisis and a sort of re-focus from netbooks to tablets, although netbooks have sold more than 100 million units in 3 years, the display investments are focused on tablets. The display business can be considered to be the worlds biggest non-profit industry, the 5 biggest LCD makers who produce 90% of the worlds LCDs, produce for $120 Billion in screens every year but can only make small profit margins out of that because of the strong competition and the large volumes shipped. Those companies that produce the worlds LCD screens have very high costs, very high risks, little flexibility. Let’s hope Pixel Qi has amply well convinced the big LCD makers like Quanta, CPT, Chi Mei, Samsung, LG, Sharp, Sony, Foxconn, let’s hope that they have all signed with Pixel Qi and that they are all right now in the process of tuning the mass manufacture of millions of these screens for all the worlds upcoming Chrome OS notebooks, ARM Powered Macbooks, Kindle4s, iPad3s, a solution for using the interactive UIs of Android on all the worlds e-readers. It would also be nice to double the battery runtime and improve outdoor readability on all the worlds Smartphones using Pixel Qi.

More information:
Pixel Qi’s first big name device manufacturing partner is the extremely ambitious ZTE [Feb 15, 2011]
Pixel Qi’s second investment round concluded by the 3M investment [Sept 19, 2011]
Reflectivity/Sunlight readability category of posts on this blog (14)

Anticipated Tablet Growth Alters TFT LCD Manufacturing Strategies, NPD DisplaySearch Reports [Dec 13, 2011]

In response to falling large-area TFT LCD panel prices in 2011, panel makers have minimized their 2H’11 production, but preparation for 2012 models and gradual clearing of supply chain inventories are encouraging panel makers to take a more positive stance in their production strategies. According to the NPD DisplaySearch Quarterly Large-Area Production Strategy Report, global TFT LCD glass input peaked in Q2’11, achieving a record 42.1 million square meters, but then fell to 36.5 million square meters in Q3’11, and is expected to reach 37.8 million square meters in Q4’11.  

In Q1’12, panel makers are expecting to increase glass input by 5%, to 39.8 million square meters. The forecast capacity utilization is 77% in Q1’12, which is 7% higher than previously expected. This is partly based on expectations that prices have bottomed out in this cycle. Also, panel makers are planning for new models, such as larger size multi-function monitor panels, ultra-slim notebook PC panels, new TV panel sizes including 39”W, 43”W, 48”W and 50”W with cost effective CCFL and LED backlights, and slim bezels. However, with 2012 market demand still unclear, panel makers foresee the possibility of adjusting capacity utilization again in Q1’12.

Table 1: Global TFT LCD Glass Input by Application (Million m²/Quarter)

Application
Q1’11
Q2’11
Q3’11
Q4’11
Q1’12
LCD Monitor
7.9
9.2
7.8
7.5
8.1
LCD TV
22.8
25.4
21.6
23.3
24.4
Notebook PC
3.7
4.3
4.0
3.9
4.0
Tablet/Mini-Note PC
0.7
1.0
1.1
1.2
1.4
Small/Medium
2.0
2.0
1.9
1.8
1.9
Others
0.1
0.2
0.1
0.1
0.1
Total
37.2
42.1
36.5
37.8
39.8

Source: NPD DisplaySearch Quarterly Large-Area Production Strategy Report

According to Shawn Lee, Senior Analyst for NPD DisplaySearch, “Increasing production does not necessarily increase shipments, as panel prices are close to cash costs in many cases. However, improved inventory and price outlooks, as well as the launch of new panel models, are leading panel makers to be more optimistic.” Lee added, “Other factors leading to the increased production forecast include the need to increase utilization rates in order to cover depreciation costs, and the fact that new panel producers in China are starting to ramp up their fabs, contributing to the increased input. Lee concluded, “After a long oversupply period, panel makers are still cautious about glass input and utilization rates, and they do not plan to increase utilization to more than 80% in Q1’12.”

Tablet Panel Production on the Rise, While Mini-Notes Slide

In mobile PC applications, panel makers plan to decrease production of mini-note PC panels while increasing production of tablet PC panels, with area production of tablet PC panels expected to double from Q1’11 to Q2’11. Panel makers are also reshaping their tablet PC panel production strategies, with Sharp using its Gen 8 fab to produce tablet PC panels with oxide TFT backplanes, and Samsung, LG Display, and Sharp producing tablet PC panels with more than 200 pixels per inch.

Other panel makers, including AUO, Chimei Innolux, BOE, CPT and HannStar, are planning to apply more production resources to tablet PC panels in 2012. Although Gen 5 and smaller fabs will mainly produce mini-note and tablet PC panels, more than half of these will be produced in Gen 6 and Gen 8 starting in Q1’12.

Table 2: TFT LCD Glass Input for Mini-Note and Tablet PC by Generation (Million m²/Month) [emphasis in red is mine]

Generation Fab
Q1’11
Q2’11
Q3’11
Q4’11
Q1’12
Gen3.5
10.8%
13.0%
8.1%
5.9%
0.1%
Gen4
1.4%
0.4%
0.1%
0%
0%
Gen5
83.9%
83.9%
74.1%
57.1%
49.4%
Gen6
3.2%
3.2%
17.7%
16.8%
10.1%
Gen8
0.7%
0.7%
0%
20.3%
40.5%

Source: NPD DisplaySearch Quarterly Large-Area Production Strategy Report

The NPD DisplaySearch Quarterly Large-Area Production Strategy Report offers the industry’s most complete view of large-area panel production by analyzing panel makers’ quarterly production plans. Subscribers receive production plans by application in different generation fabs, with granular detail down to the size by aspect ratio and by country. With 100% coverage of panel makers, the Quarterly Large-Area Production Strategy Report provides reliable information and insight needed to evaluate production strategies, understand current capacity, spot key supply trends before it is too late and manage inventory. Please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail contact@displaysearch.com or contact your regional NPD DisplaySearch office in China, Japan, Korea or Taiwan for more information.

About NPD DisplaySearch
Since 1996, NPD DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. NPD DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with The NPD Group, its parent company, NPD DisplaySearch uniquely offers a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on NPD DisplaySearch analysts, reports and industry events, visit us at www.displaysearch.com. Read our blog at www.displaysearchblog.com and follow us on Twitter at @DisplaySearch.

About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit www.npd.com and www.npdgroupblog.com. Follow us on Twitter at @npdtech and @npdgroup.

Low Temperature Polysilicon and IGZO Production Forecast to Skyrocket 150% in 2012 [Dec 19, 2011]

Adoption of High Mobility TFT LCD Backplanes in the iPhone and iPad Create a New Paradigm in FPD Manufacturing

Santa Clara, California, December 19, 2011—The explosive growth of smart phones and tablets has made high performance TFT technologies, particularly LTPS (low temperature polysilicon) and IGZO (indium gallium zinc oxide), critical to production of the high resolution displays used by these devices. These TFT technologies employ high mobility semiconductor materials, which allow panel manufacturers to shrink TFT dimensions and increase light transmission. LCDs with greater than 230 ppi (pixels per inch) resolution, such as Apple’s Retina Display, are enabled by high transmission because it minimizes power consumption, allowing mobile devices to run longer without recharging.

According to the NPD DisplaySearch TFT LCD Process Roadmap Report, high mobility backplane production is forecast to grow 150% from 5.6 million square meters in 2011 to 14.1 million square meters in 2012. Drivers for this tremendous growth include multiple Gen 5 and larger LTPS fabs starting production in 2012, as well as expected IGZO production on existing lines by Sharp, LG Display and Samsung.

Figure 1: Manufacturing Capacity Devoted to High Resolution Backplane Production

Source: NPD DisplaySearch TFT LCD Process Roadmap Report

Smart phones, tablets and cost reduction are expected to be the key drivers pushing the FPD industry in 2012,” stated Charles Annis, NPD DisplaySearch Vice President of Manufacturing Research. “With FPD profitability under extreme pressure, LCD makers are focusing development efforts on rapidly-growing mobile segments and a wide array of cost reduction strategies. Because of this, high mobility backplanes, optical alignment, high resolution lithography and advanced LC modes are expected to be some of the most important manufacturing technology trends over the next year.”

All of these technologies target increasing panel transmission. With only about 4-9% of illumination generated by LCD backlights making it to the front of screen, very powerful light sources are required to meet LCD brightness specifications. In addition, backlight units are the single most expensive components in large-area LCD modules. Thus, by increasing transmission, panel makers can trade off power consumption and costs.

“However, a lot of know-how and proprietary technology are required to successfully increase transmission without sacrificing yield. Panel makers and their suppliers are racing to create competitive advantages through manufacturing technologies to increase profitability in 2012,” Annis added. “Any technology, such as IGZO, that may simultaneously lower costs while improving performance offers a double competitive advantage to panel makers, and potentially can create a new standard in FPD manufacturing.”

The new NPD DisplaySearch TFT LCD Process Roadmap Report offers a unique and unprecedented guide to these rapidly evolving FPD manufacturing technologies. The report provides technical discussions, process flows, production status by maker, adoption forecasts for 57 technologies and analysis of benefits, opportunities, negatives and challenges. Additionally, LCD cost and performance specifications for manufacturing technologies are projected through 2016.

For more information about the new NPD DisplaySearch TFT LCD Process Roadmap Report please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail contact@displaysearch.com or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan for more information.

Apple to utilize IGZO panels for its new products [Dec 30, 2011]

Apple is expected to push forward the adoption of IGZO (indium gallium zinc oxide) flat panels, instead of IPS (in-plane switching) panels used currently, for its next-generation mobile display products, according to sources in Apple’s supply chain.

Starting with the new iPads, Apple will utilize IGZO panels from Sharp in order to upgrade the display resolution of the new tablets to full HD level, the sources indicated.

To enter the supply chain of iPads, Sharp has switched some of its capacity for large-size panels to the production of small-size panels for smartphones and tablet PCs, said the sources, adding that Sharp will also continue to roll out its Galapagos tablet lineup in 2012 using IGZO panels.

Most Taiwan-based flat panel makers are capable to produce IGZO panels, but the yield rates of such panels still remain a major concern for the makers, said the sources.

Digitimes Research: iPad pricing to change tablet game [Jan 3, 2011]

Market watchers have mostly expected Apple to follow its traditional pricing strategy for its next-generation tablet device, which is likely to start from US$499 with the present iPad 2 to drop to US$399. But if Apple releases two versions of the new iPad, as reported by Digitimes, the vendor’s pricing strategy may change.

Sources from Apple’s supply chain have claimed that there will be two versions of the new iPad, one targeting the high-end segment and the other the mid-range. Digitimes Research believe the two new iPad models will both be equipped the A6 processor with high-end model coming with a high resolution panel (2048×1536) and the mid-tier model featuring the same grade of panel as iPad 2 (1024×768).

With the existing iPad 2, the Apple tablet series may cover all price segments – from entry-level to high-end. Apple’s pricing strategy for its iPad series is crucial to the tablet market. It remains to be seen at what price level Apple will set its entry-level iPad. For Wi-Fi only models, US$299, US$349 or US$399 may all be possible.

Currently, the non-Apple camp is maneuvering in the US$199-399 range. If Apple drops its iPad price to US$299, it could seriously affect the non-Apple camp’s pricing strategy and even Amazon’s Kindle could also be affected.

Apple to unveil two versions of next-generation iPad in January, sources claim [Dec 29, 2011]

Apple is set to unveil its next-generation iPad – which will come in two versions – at the iWorld scheduled for January 26, 2012, according to sources at its supply chain partners. The new models will join the existing iPad 2 to demonstrate Apple’s complete iPad series targeting the entry-level, mid-range and high-end market segments, the sources claimed.

The iPad 2 will be competing directly with Amazon’s kindle Fire in the price-sensitive market segment, while the new models will focus on the mid-range and high-end segments respectively, the sources said.

Apple officials declined to comment.

Instead of the previously-rumored 7.85-inch, the upcoming iPad models will still feature 9.7-inch screens but come with QXGA resolution (1,536×2,048 pixels), the sources indicated. Dual-LED light bars are designed for the new iPads to strengthen the brightness of the panels, the sources added.

Sharp will be the major panel supplier for Apple’s next-generation iPad series, while Samsung Electronics and LG Display are also responsible for a part of the orders, the sources said. Minebea, from which Sharp sources backlight units (BLUs), has accordingly entered the supply chain for the new iPads, the sources pointed out.

Apple continues to contract Samsung to manufacture its quad-core A6 processors, which will be used in the next-generation iPads, the sources revealed. The existing iPad 2 is based on the dual-core A5.

Samsung is also among the CMOS image sensor (CIS) suppliers for one of the versions of the new iPad that comes with a 5-megapixel lens, marking the Korea-based vendor’s first time to grab CIS orders from Apple, the sources noted. Sony is the other CIS supplier for the other model with a higher 8-megapixel lens, the sources added.

In addition, Simplo Technology and Dynapack International Technology have both secured orders for batteries with a capacity of as high as 14,000 milliampere-hour (mAh) used in the new iPads, according to the sources.

Updates:

Chimei Innolux to Cut Capital Spending to NT$30B. in 2012 [Jan 4, 2011]

Chimei Innolux Corp., the largest thin film transistor-liquid crystal display (TFT-LCD) panel manufacturer in Taiwan, plans to keep 2012 capital spending to under NT$30 billion (US$1 billion) compared to about NT$50 billion (US$1.67 billion) in 2011, according to CEO Tuan Hsing-chien.

The panel maker aims to utilize its capital spending to develop new technologies, including IPS (In-Plane Switching).

Chimei Innolux claims that all its businesses, including large-sized, small- and medium-sized and touch panels, will grow clearly in 2012, especially when the touch-panel shipments are forecast to increase 40%.

Tuan stressed that Chimei Innolux`s system-integration (assembly) business unit will totally spin off in 2012. The company`s system assembly business once generated revenues of about NT$10 billion (US$333.3 million) per year, and now about NT$5 billion to NT$6 billion (US$166.7 million to US$200 million), with revenue expected to rise regardless in 2012.

The CEO pointed out that the maker engaged in many basic works in 2011, including development of LED-backlighting and three-dimension (3D) panel products, as well as new TV-panel sizes as 39- and 50-inch. He added that Chimei Innolux`s shipments of small- and medium-sized panels will grow 20% to 30% in 2012, backed by added capacities of two of the company`s 4.5th-generation (4.5G) factories.

Tuan said that the company will continue to accelerate the development of active matrix organic light-emit diode (AMOLED) panels, which are to be small-volume produced in the third quarter.

Chimei Innolux to Supply Panels to 2nd-Gen. Kindle Fire [Dec 21, 2011]

Chimei Innolux Corp., the largest maker of thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan, recently won Amazon`s order for panels used in its Kindle Fire second-generation tablet PCs.

The company is already a panel supplier to Apple`s iPad 2, and the new order from Kindle Fire would further consolidate Chimei Innolux`s leading position in Taiwan in supplying tablet-use panels.

Industry sources said that tablet-PC panel is one of a few panel models still generating profits now for panel suppliers, so the new order is expected to have positive effects on Chimei Innolux`s operation.

The first-generation Kindle Fire was contract assembled by local Quanta Computer Inc. using panels supplied by Korean company LG Display and Taiwanese maker E Ink Holdings Inc. (formerly known as Prime View International Co., Ltd., who contracted local Chunghwa Picture Tubes, Ltd., or CPT to produce the panels).

Hon Hai Group [i.e. Foxconn] of Taiwan reportedly won the contract-assembly order for the second-generation Kindle Fire, allowing its affiliate Chimei Innolux to supply the panels.

Data compiled by market research firm iSuppli showed that Chimei Innolux ranked as the world`s No. 3 supplier of tablet-PC panels, trailing only LG Display and Samsung. With the new order from Amazon, Chimei Innolux`s market share is expected to rise further, industry sources said.

Chimei-Innolux Plans to Sell Production Equipment to Brazil [Dec 19, 2011]

Eike Batista, the richest person in Brazil, has reportedly planned to join hands with a Brazilian bank and Hon Hai Group in establishing an FPD (flat panel display) plant in Brazil by procuring existing 6th or 7.5G equipment from Chimei-Innolux at several tens of billions of NT dollar.

The project, if materialized, will enable Hon Hai to expand its deployment, while helping Chimei-Innolux weather its financial plight.

In response to the news, Chimei-Innolux reported yesterday (Dec. 18) that the company is evaluating related projects. Hon Hai failed to respond to the report. The Brazil side reportedly dispatched a delegation to Taiwan to study the feasibility of the project recently.

Brazilian media revealed that Batista already signed an agreement with Brazilian bank BNDES and Hon Hai [i.e. Foxconn] for the project recently. Initial investment will top US$4 billion, including US$500 million from Batista and US$1.2 billion from BNDES. Hon Hai intends to provide technology, without contributing fund. The investors intend to purchase the existing production equipment of Chimei-Innolux.

Chimei is considering selling its sixth- or 7.5th- generation plant to the project, with the former capable of turning out panels for use in tablet PC and TV and the latter mainly for the production of TV panels.

Sixth-generation plant is not the mainstream equipment on the market but still worth several tens of billions of NT dollar. The sales will greatly alleviate the financial pressure for Chimei-Innox, which has suffered red inks for six quarters in a row and is having difficulty in obtaining syndicated banking loans.

Brazil has a huge consumption market, with local sales of LCD TV topping 8 million units this year, for 40% growth. The country, however, doesn’t have FPD plants. Hon Hai, therefore, has planned to set up LCD TV production base in the country.

Foxconn denies rumors of Chimei takeover [Dec 9, 2011]

Foxconn, the world’s largest contract manufacturer of electronic products, has denied rumors that the companu is to play a larger role in Chimei Innolux’s operations after the Taiwanese flat panel maker’s chairman Frank Liao resigned Thursday.

Chimei’s stocks were boosted this week on the rumor that Liao’s resignation signifies a personnel shakeup that could include more influence from stakeholder Foxconn. If Foxconn were to play a larger role in the company, their success in the technology manufacturing industry could help give Chimei Innolux an edge.

Foxconn said the speculation about its future role at Chimei is just rumors and that Chimei Innolux will still be run by its own board.

Foxconn also stressed that it is only a shareholder of the company, holding 11% of Chimei shares, fewer than Chimei Corporation‘s 13.57%. Of the 11% holdings, 2.9% are personal investments by Foxconn founder Terry Gou. Foxconn says Gou’s holding are separate from the company’s investments. Foxconn remains the second largest shareholder of Chimei Innolux after Chimei.

Chimei Innolux to come under management of Foxconn [Dec 4, 2011]

Chimei Innolux chairman Frank Liao, right, has resigned and may be succeeded by CEO Tuan Hsing-chien, left, or Foxconn founder Terry Gou.
Chimei Innolux chairman Frank Liao, right, has resigned and may be succeeded by CEO Tuan Hsing-chien, left, or Foxconn founder Terry Gou.

Electronics contract manufacturer Foxconn may gain full management rights over flat panel maker Chimei Innolux as chairman Frank Liao resigned for health reasons and vice chairman and CEO Tuan Hsing-chien stepped down from the board but remained as CEO on Saturday. Foxconn founder Terry Gou and Tuan are the most popular candidates to succeed Liao at the Taiwan-based company.

There has been sepculation regarding the timing of Liao’s resignation. The flat panel maker has been struggling to secure a NT$40-$60 billion (US$1.3-$2 billion) consortium loan to save its faltering business, which has been blamed as the main cause of 74-year-old Liao’s deteriorating health.

Chimei has also struggled to cope with corporate infighting since it merged with Innolux Display in 2010. The two companies have a very different corporate culture and their similar organizations have seen an overlap in each other’s authority, creating constant leadership fights. They have therefore not seen much benefit from the consolidation of the flat panel sector that Taiwan’s government has called for since 2008. The tensions between them were raised even higher recently as Chimei Innolux attempted to split up its touch screens and medium and small display departments.

Liao’s resignation is widely viewed as signifying an end to Chimei’s influence over the company and the rise of a new leadership headed by Foxconn, where it is believed Terry Gou may take the helm himself.

The Taiwan-based Foxconn is the world’s largest contract manufacturer of electronic products, which counts Apple among one of its biggest clients.

LCD makers look to gain from growth in Chinese market [Dec 30, 2011]

Taiwanese display panel manufacturers AU Optronics and Chimei Innolux have benefited from the growing sales of LCD TVs in the Chinese market, which looks set to continue expanding in the near future.

Chimei has held the top spot in terms of market share in China for eight months straight, closely followed by AU. As of November, Chimei accounted for 30% of the Chinese market, while AU followed with 21.9%. South Korea-based LG and Samsung rounded out the top four, accounting for 21.7% and 20%, respectively. BOE, a Chinese brand, has also seen good performance in recent months, with a growth rate of 53% in November and market share of nearly 6%.

According to a report by LCD market research firms WitsView and Eintell, total shipments for the six largest TV brands came to 4.2 million in November, a figure that was higher than previously expected and is estimated to rise in December. Display panels sales also saw a higher-than-expected growth rate — 32.9% — in November.

WitsView also indicates that one of the important focuses for LCD makers next year will be TV size. Chimei will continue to develop and manufacture TVs of different sizes for the Chinese market, following its new 39-inch and 50-inch models. Samsung plans to produce 39-inch and 52-inch TVs.

An official at WitsView said that although LCD sales had increased thanks to Black Friday in the United States, it is still not clear whether demand for TVs will match supply after Chinese New Year.

Taiwan flat panel production value tops NT$1.39 trillion in 2011, says PIDA [Jan 2, 2012]

The production value of TFT LCD panels produced by Taiwan flat panel makers totaled NT$1.39 trillion (US$45.89 billion) in 2011, including NT$797 billion for large-size panels and NT$241.8 billion for small- to medium-size panels, according to an estimate of the Taiwan Photonics Industry and Technology Development Association (PIDA).

In terms of production volume, shipments of small- to medium-size panels reached 1.694 billion units for 2011, an increase of 21% from a year earlier, PIDA said.

Chunghwa Picture Tubes (CPT) was the top vendor in the small- to medium-size panel segment with shipments totaling about 500 million units, accounting for a 30% share, PIDA added.

Chimei Innolux (CMI) came in second in the same segment with shipments totaling 425 million units in 2011, accounting for a 26% share, down from 31% of a year earlier.

HannStar Display‘s shipments of small- to medium-size panels soared 67% to 414 million units during the year, but shipments of small- and medium-size panels from AU Optronics (AUO) slid 14% to 190 million units in 2011.

Shipments of small- to medium-size panels will continue to grow in 2012, since smart mobile devices will remain the mainstream products in the year and more low-priced smartphone will be rolled out, PIDA concluded.

Chunghwa Picture to be Taiwan’s top maker of small and medium panels [Dec 29, 2011]

Chunghwa Picture Tubes, Ltd. (CPT) will replace Chimei Innolux Corp. as Taiwan’s biggest maker of small and medium panels by the end of this year thanks to a shift in product mix, a Taipei-based industry association predicted Thursday.

The Photonics Industry and Technology Development Association (PIDA) said that shipments of small and medium panels in Taiwan will amount to around 1.69 billion units in 2011, up 21 percent year-on-year from the 1.4 billion units recorded in 2010 in light of strong demand from the smartphone and tablet PC markets.

Shipments of CPT’s small and medium panels in 2011 will increase by 42 percent from 352 million units last year to reach 500 million units, moving the Taoyuan-based company into the top spot in the market with a 30 percent share, the PIDA said.

Last year, CPT took 25 percent share of the market and ranked the second-largest vendor behind Chimei Innolux, according to the association.

CPT’s huge growth can be attributed to a transformation of its Generation 6 plant to produce high-end small and medium panels for smartphones, the PIDA said.

CPT Steps into Smartphone Panel Biz [Nov 2, 2011]

Chunghwa Picture Tubes, Ltd. (CPT), a major thin film transistor-liquid crystal display (TFT-LCD) panel manufacturer in Taiwan, recently announced to venture into the cellphone-display panel field, claiming also to utilize a sixth-generation (6G) production line to produce projected capacitive touch panels.

CPT said that it had modified a 4.5G production line specially for production of capacitor touch panels and 0.3T glass. To meet strong demand, the company has been aggressively adjusting product mix and upgrading technological capability, having successfully developed 3.5-inch panels for smartphone application and will begin mass production of such product at its 6G line in November.

CPT also aims to produce over-4-inch WVGA (400×800 and 400×864) smartphone panels, expecting to complete the project by year-end.

According to the panel manufacturer, it has been raising shipment of small- and medium-sized panels, hence successfully evading impacts from oversupply in the third quarter by shipping less TV and consumer-electronics panels. In the fourth quarter, CPT`s area of small and medium panels shipped is expected to rise to 70% to 80%, helping to improve profitability.

In the third quarter, CPT shipped 137 million small- and medium-sized panels, a record quarterly high, as well as a 22.8% quarter-on-quarter (QoQ) and 35.3% year-on-year (YoY) increase, with such shipments accounting for 60% of CPT`s total shipments during the period.

In the first three quarters, CPT shipped 346 million small- and medium-sized panels, up 41.2% YoY, and is expected to ship some 500 million such products this year.

China’s flat-panel queen calls for further industry cooperation [Jan 3, 2012]

Bai Weimin, vice president of the China Video Industry Association. (File Photo/Yen Chien-lung)
Bai Weimin, vice president of the China Video Industry Association. (File Photo/Yen Chien-lung)

Taiwan’s flat-panel sector should further its cooperation with China so that both sides of the Taiwan Strait can jointly establish industry standards for smart televisions, tablet computers and next-generation AMOLED display technology, says Bai Weimin, vice president of the China Video Industry Association.

In an interview with our Chinese-language sister newspaper Want Daily, Bai, who has been dubbed “China’s flat-panel queen,” said there was a large gap between the number of flat panels supplied by Chinese manufacturers and annual demand in the mainland market. China produced 100 million color televisions annually, while local manufacturers such as BOE could only supply over 20 million panels, Bai said.

Therefore, Bai said she encourages Chinese companies to import flat panels from Taiwan. She expects procurement in 2012 to total US$4 billion, the same amount as last year.

Last June, Bai announced a flat-panel procurement deal worth up to US$5.5 billion, when she visited Taiwan. It was difficult to implement nearly 80% of the deal towards the end, Bai said, given the poor market environment prevailing in western countries, the leading export market.

Bai also said that China’s purchases of Taiwanese flat panels doubled between 2008 and 2010. The average size of panels had also increased from 2009’s 30.3 inches to an estimated 39.5 inches in 2011.

Bai hopes that the Taiwanese government’s restrictions — only allowing flat-panel makers to adopt production technology one generation behind Taiwan’s in their Chinese operations — will be lifted soon.

Furthermore, she said several Taiwanese flat-panel makers had established joint ventures with Chinese television manufacturers, such as AU Optronics‘ collaboration with Haier and TCL, and Chimei Innolux‘s venture with Hisense and Konka. These companies, along with six others, were also members of a task force set up in 2008 to promote the flat-panel display industry across the Taiwan Strait.

Bai added that cross-strait cooperation should be further strengthened and should focus on improving post-sales service, standardization of technology, closer exchange and capital cooperation.

Speaking of her forecast for the global television market, Bai said she expects global demand to fall between 220 million and 230 million units in 2012, while China will produce 120 million units. Although a great push was still required for Chinese television manufacturers to establish a global brand, Bai said, 70 million units produced in China would be sold overseas.


1 Comment

  1. […] market in China is ready to define the 2012 smartphone war [Experiencing the Cloud, Jan 6, 2012] – Shrinking capital investment in the worldwide LCD industry [Experiencing the Cloud, Jan 2 – Feb 6, 2012] – Good TD-LTE potential for target commercialisation […]

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