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Labor shortages in China as young people are much less willing to work under harsh working conditions–all this “compensated” for the time being with compulsory student labor required to get the graduation certificates

April 15, 2013 2:16 pm / 1 Comment on Labor shortages in China as young people are much less willing to work under harsh working conditions–all this “compensated” for the time being with compulsory student labor required to get the graduation certificates

After a similar situation three years ago Help wanted: China’s labor shortage [CNNMoney, March 8, 2010], just in eastern China:

As China’s economy improves, Chinese workers have better options and employers are struggling to find cheap labor.

now ODMs, component makers face labor shortages in western China [DIGITIMES, April 12, 2013]

Mainly because Taiwan-based notebook ODMs have been accelerating the process of shifting production to plants in Chongqing and Chengdu, in western China, the factories of ODMs and component makers in the region are seeing increasing difficulty recruiting enough workers, according to Taiwan-based supply chain makers.

Since the ODMs and related upstream suppliers are already facing labor shortages during the slow season (the first half) of 2013, the sources are concerned that the shortages will become more serious in the second half.

Acer’s 7-inch entry-level tablet is also suffering from unstable supply due to a labor shortage at component suppliers.

Quanta Computer plans to move all its notebook production except those for Apple, to its plants in Chongqing in 2013. Compal Electronics will shift 90% of its notebook capacity to Chongqing plants and will expand capacity in the second quarter.

Since people in western China are less willing to work in factories, the governments are mainly pushing student workers to aid the IT firms. Currently, about 50% of IT firms’ workers in Chongqing are students, and in Chengdu the proportion is 60-70%, the sources noted.

Since students in western China are required to conduct internship activities at factories in order to graduate, the governments can easily mobilize a large number of student workers to help IT firms. However, student workers’ high rates of absenteeism is causing the makers difficulties managing their production line manpower.

In addition, recruitment competition will also become a serious issue as the makers will need to offer attractive packages to draw people’s attention, but it will impact their profits, the sources said.

TheNewYorkTimes YouTube channel, published on Dec 27, 2012 http://www.youtube.com/watch?v=JtcQMFeNeTw

Hewlett Packard’s better practices which could be a model for others in the electronics industry [1:00 – 3:50], see also the related written report:

The factory [with 14,000 workers], in Chongqing, makes computers for Hewlett-Packard, a company with little of Apple’s glamour. It is operated by Quanta, a little-known Taiwanese manufacturer.
…
Neither Quanta nor Hewlett-Packard claims it has solved every labor woe. And the amenities are partly selfish: one of the biggest problems for Chinese factories is that workers are constantly leaving. Hewlett-Packard hopes that by improving living conditions, turnover and training costs will fall.

What changes Foxconn has made, and what challenges lie ahead as Foxconn and Apple say they are trying to improve working conditions? [4:23] See also the other parts of the related written report, Signs of Changes Taking Hold in Electronics Factories in China [The New York Times, Dec 26, 2012]:

With 1.4 million employees in China — the most of any private company — Foxconn is setting a bar that all manufacturers will be judged against, say executives at other companies.

“When the largest company raises wages and cuts hours, it forces every other factory to do the same thing whether they want to or not,” said Tony Prophet, a senior vice president at Hewlett-Packard. “A firestorm has started, and these companies are in the glare now. They have to improve to compete. It’s a huge change from just 18 months ago.”

…

Foxconn, more than any other company, has proved that Chinese plants can deliver obsessive attention to quality. The company has helped make China into a manufacturing juggernaut through strict discipline that is visible everywhere, even in the salutes managers give visiting executives. That discipline, say former Apple executives, is one reason every iPhone is put together so well. …

… Though Foxconn has trained managers to treat employees more gently, foremen still use profanity and intimidation, workers say. The managers speak in a manner that often feels like a threat,” said Mou Kezhang, who works in iPad quality assurance at the Foxconn factory in Chengdu [with 164,000 workers producing iPads for Apple out of 1.4 million employees in China].

Here is what was A typical work day for a Foxconn worker in Chengdu (animation only) [NMANewsDirect YouTube channel, May 10, 2011]

[Note the date, which is 2 years earlier!] This animation illustrates a routine day in the life of a Chinese worker working on an assembly line for the new iPad 2 at Apple supplier Foxconn’s two factories in Chengdu. According to a report by Hong Kong NGO Students & Scholars Against Corporate Misbehavior, Foxconn workers must work 80 to 100 hours of overtime per month, in addition to 174 hours of regular work, to make ends meet. They earn an average of $186 per month.

Background report: Foxconn and Apple Fail to Fulfill Promises: Predicaments of Workers after the Suicides [Students & Scholars Against Corporate Misbehavior, May 7, 2011]

FLA REPORT SHOWS SOME POLICY CHANGES AT FOXCONN BUT FEW IMPROVEMENTS FOR WORKERS [Students & Scholars Against Corporate Misbehavior, Aug 24, 2012]

On 21 August, the Fair Labor Association (FLA) released a verification report on labour practices at three Foxconn factories producing for Apple in China that were the subject of an earlier FLA investigation. In its report, the FLA trumpets the speedy progress at Foxconn in remediating widespread labour rights violations. However the FLA has overstated the improvements at Foxconn. Firstly, most of the actions completed by Foxconn are changes at the policy level only, but few substantial changes in labour practices were found at this stage. Secondly, Foxconn has deliberately delayed implementing many of the actions called for in the remediation plan, even those that are almost cost-free. Thirdly, workers have had no opportunity to participate in the remedial action process. SACOM has repetitively demanded democratic trade unions at Foxconn as an indispensable step in reforming its labour practices.

…

Terry Gou always speaks proudly of “Foxconn-speed”. The world’s biggest IT manufacturer can build a factory in 76 days in Chengdu. When talking about legal compliance, however, Foxconn buys time by undertaking “gradual reform.” To be fair, SACOM agrees that some reforms take time to accomplish. However, it makes little sense that Foxconn is reluctant to immediately rectify some problems that do not require expenditure of much of the company’s considerable resources. For instance, Foxconn still refuses to deliver a copy of the collective bargaining agreement to workers, and workers are kept in the dark about the company’s remedial action plan.

SACOM reiterates that factory inspection alone cannot eliminate labour rights violations. A democratic trade union trusted by workers is the most sustainable solution towards decent working conditions.

Those Were the Years, When I Was at Foxconn 那些年, 我在富士康 [sacom2005 YouTube channel, Feb 24, 2013]

The video is an interview of a young female former Foxconn worker’s work and resistance at the mold production shop floor. She tells having entered Foxconn when she was 18 years old, at first earning just 1 Chinese yuan a day as trainee but actually working the same as other workers. The dusty environment and corrosive chemicals used put the workers’ health at risk but when injured, workers had to apologize in work meetings instead of getting proper treatment and compensation. Workers who stood up for better protection would be pressured to keep silent. Her testimony adds to the growing number of stories we hear, of young migrant workers being exploited. We are left to reflect: do we really understand the thousands of human faces behind the successful images and huge profits of those IT brands, including Apple?

Current situation: [OPEN LETTER TO APPLE’S SHAREHOLDERS] INFLUENCE APPLE WITH YOUR SHARES [Students & Scholars Against Corporate Misbehavior, Feb 26, 2013]

Dear Apple’s shareholders,

On the eve of Apple’s annual shareholders meeting in the U.S., Students & Scholars Against Corporate Misbehaviour (SACOM) and other labour organizations in Hong Kongcome to the Apple Store located in Causeway Bay, to protest against the Apple Inc. (Apple) conniving at suppliers’ harsh labour practices. Meanwhile, SACOM also take the opportunity appeal to shareholders to look squarely at Apple’s shameless infringement on labour rights. Apple shareholders should use their influential power to take part in governing Apple and to force the management to adhere to the labour rights standards.

Since 2005, Apple has released the Apple Supplier Code of Conduct stating that suppliers should comply with the international labour standards, and requesting that “Apple’s supply chain provides safe working conditions, respect workers, that they are treated with dignity”. SACOM, however, find Apple fails in its responsibilities which laid down in its Supplier Code of Conduct. To make sure that workers can meet the daily production targets, the management adopt a number of inhumane management methods. For instance, depriving workers’ legitimate rights to take toilet breaks, ergonomic breaks and meal breaks.

Apple joined the Fair Labor Association (FLA) in January 2012, but the labour rights abuses are still widespread in Apple’s supply chain.. At the end of 2012, SACOM conducted investigation in three Apple’s suppliers, Foxlink, Pegatron and Wintek. Similar to Foxconn, military-style management is adopted in the factories. Rampant labour rights violations including unpaid overtime work, long working hours, forced internship, excessive use of dispatch labour, poor occupational safety. The following is the voice from a Sichuan student who worked at the polishing department of Riteng for producing iPads.

“The production target is 5000 pieces per day. I am really exhausted…. I want to go back to the school, but my teacher said we would not receive our graduation certificates if we left.”

Apple always deploys its staff to monitor the on-site production process at its suppliers. Obviously, it knows very well on the non-compliance, but it keeps turning a blind eye to the problems. Apple’s net profit recorded at US$ 41.7 billion (about HK$ 325billion) last year. Yet, it still requires its suppliers to complete the production by urgent orders with a very low unit price and a short delivery time. Harsh management methods are inevitably adopted. Although Apple has been well-informed of these violations, it has intentionally neglected its corporate social responsibility. All these labour rights violations are incredibly shameful.

Shareholders, as the company’s investors, should bear the moral responsibility for the operation and purchasing practices of Apple, and monitor Apple to improve the labour practices at its suppliers. SACOM call on Apple’s shareholders to scrutinize the company to strictly enforce its commitment on its Code of Conduct and corporate social responsibility, that is:

to allow workers to form trade unions by democratic elections in accordance with the Chinese Trade Union Law;

to stop using student workers immediately;

to provide a living wage of all workers which enables workers to support themselves and their families;

to review management methods and to ensure workers are treated with respect and dignity;

to conduct labour rights training for workers, particularly training on occupational health and safety; and

to compensate victims for the non-compliance of the Apple’s Code of Conduct.

Yours faithfully,
Students & Scholars Against Corporate Misbehaviour

Chongqing – the unofficial biggest city in the world [stefhoffer YouTube channel, March 3, 2012]

This clip gives an introduction into Chongqing, to some accounts the biggest city, or municipality, in the world. While the urban population nears 10 million, the entire municipality currently has close to 32 million inhabitants. The city provides an insight into the rapid urbanization currently taking place in China. Migrant workers flock from the countryside to work in cities, where wages are often higher than in rural areas. Nevertheless, most of them end up making extremely long work days. China’s government considers merging populations of large cities in belts of ‘super cities’. Chongqing would form one of the major parts of such an urban sprawl, which would stretch all the way to Shanghai. Copyright of all footage: Stef Hoffer Media

Downtown Chongqing (Part 1) 重庆市区 [Austin Guidry YouTube channel, March 29, 2013]

Me and my buddy Ryan visit downtown Chongqing. Chongqing’s pretty much a province, but there is a “downtown”, which is Chongqing proper. Interesting place! Like me on Facebook:http://www.facebook.com/letchinasleep2

Three views of Chengdu, China [globaltravel196 YouTube channel, Oct 15, 2012]

The footage was taken in and around Chengdu, China. A bustling metropolis in the southwest of China, yet when you take a step back and look at the Sichuan locals, they enjoy life and move at their own pace.

Commentary: Labor shortages, rising wages in China push notebook component firms toward automation [DIGITIMES, April 1, 2013]

China continues to increase minimum wages but labor shortages along the coast continue sending the notebook supply chain moving inward to central China. The lack of labor is notebook firms’ biggest problem currently and some brands have decided to work with component providers to build automated production lines. However, some other firms have noted that automation is difficult to achieve because currently there are no standards or rules to follow.

China’s wage levels continue to climb despite the slowdown of the global economy. According to statistics, since the beginning of 2013, seven major provinces and cities such as Beijing, Zhejiang, Henan, Shaanxi, Guizhou, Guangdong, and Shenzhen have all increased their minimum wages. Take Shenzhen for example, the minimum wage was increased from CNY1,500/month (US$241/month) to CNY1,600/month [US$257/month], the highest in China. As for minimum hourly wages, the highest is Beijing at CNY15.2/hour [US$2.4/hour].

Actually many firms have been paying their workers more than the minimum wages in order to secure their workforce, and in the past this usually happend in the coastal areas, such as Kunshan, Shanghai and Guangdong, where big firms and major manufacturing facilities were mostly located. Now this is also happening in inland areas, as firms move away from the coast looking for cheaper labor.

In the notebook supply chain, most firms such as Foxconn Electronics (Hon Hai Precision Industry), Quanta Computer, Compal Electronics, Wistron, and Inventec are all gathered in Chongqing or Chengdu in central China, and this will raise the labor costs in those regions.

Some observers have noted that labor shortages in China are worsening because young workers are reluctant to enter the manufacturing sector. This will cause problems such as delayed shipments and increasing labor expenses.

Some component makers believe by upgrading to automated production process, the problems can be solved. Simplo, a Taiwan-based notebook battery provider which has a global market share of 20%, faces labor shortages during the boom season. The firm has been aggressive in increasing the percentage of automated production in recent years, which has helped the firm increase efficiency by 40%.

Notebook firms revealed that many in the supply chain were at first reluctant to move plants to Chongqing due to moving costs. They received subsidies from the local governments, but they know that it is not a long-term policy. Labor shortages and increasing labor costs will likely continue and firms may be forced to move again. Hence, automated production may be one of the solutions to this problem.

Foxconn reportedly to move production lines out of China [DIGITIMES, Feb 27, 2013]

Seeing that Foxconn Electronics (Hon Hai Precision Industry) has no plans to recruit standard workers in China, rumors have started circulating in the IT market that Foxconn is considering moving its investment focus from China to countries such as Brazil, Indonesia, Taiwan and the US.

Foxconn has declined to comment on the rumors, but some market watchers noted that China will still be an important investment target for the company in 2013, judging by the current market status.

Foxconn’s recent investments worldwide should not be regarded as moves out of China since the investments simply show the maker’s global market planning, the sources pointed out.

Although China’s rising labor costs and strict policies for environmental protection will gradually impact Foxconn’s profitability, compared to the US, Brazil and Indonesia, China currently still has advantages in terms of cost and infrastructure, the sources said.

Acer to shift 90% notebook production to Chongqing, China [DIGITIMES, March 1, 2013]

Acer recently decided to increase the percentage of notebook production in Chongqing, China to 90%, beginning in the second quarter of 2013, according to industry sources. Due to increasing production in Chongqing, as well as Chengdu (both being in western China), local supply of labor and components is expected to be tight.

As growth of the notebook industry slows down, ODM firms have been more sensitive to production cost changes. While scattered manufacturing plants mean higher production costs, the ODMs have been working towards centralizing their production. Nevertheless, brand clients have been more eager to diversify risks by issuing orders to plants in different locations. But the ODMs have managed to have Acer agree to shifting most of its production to western China.

HP has shifted production for most of its notebooks to Chongqing while Dell and Lenovo’s production mainly takes place in Chengdu. As for Acer, its major ODM partners Quanta Computer and Wistron have moved 100% of their notebook production capacity to Chongqing while Compal Electronics, which maintained 50% of capacity in Kunshan and 50% in Chongqing in 2012, will increase the proportion of capacity in Chongqing to 90% in 2013, the sources said, adding Compal will start moving its equipment in the second quarter.

With the exception of Apple products, Quanta’s notebook production for other brands will be moved to Chongqing, the sources said. To meet clients’ demand, Compal continues to have notebook production in Kunshan, Chengdu, Chongqing and Hefei. However, Compal’s Hefei plant is a joint venture with Lenovo and due to its location, production costs have been rising, and hence company president Ray Chen has disclosed plans to centralize capacity by moving production to the western regions in China. Compal’s Chengdu plant is predicted to ship more than 500,000 units per month in the second quarter and the Chongqing plant is expected to achieve the same figure starting in March and April.

The sources revealed that while notebook production will be concentrated in Chongqing and Chengdu, the ODMs will keep their tablet and server production lines in Shanghai, Songjiang, and Kunshan. Take Inventec for example, the firm plans to shift production focus at its Shanghai plant from notebooks to servers and all-in-one (AIO) PCs.

The centralization of notebook capacity in Chongqing and Chengdu has prompted component providers to consider moving production to the western regions of China as well.

The sources said the labor cost in inland China is relatively low compared to coastal regions but the transportation cost remains high. So far the cost difference in transportation has been subsidized by the local government but no one knows when the subsidy might end, the sources added.

According to statistics provided by the city government of Chongqing, export processing trade value increased 150% in 2012, reaching US$15.364 billion. Notebook exports reached 35.44 million units, an on-year growth of 130% with an export value of US$12.541 billion. Notebook export value accounted for almost 30% of total 2012 export value of Chongqing.

China’s Chongqing Plans 1.5 Trillion Yuan Investment: Xinhua [Xinhua via Bloomberg, Aug 20, 2012]

China’s southwestern municipality of Chongqing plans to boost industrial investment to 1.5 trillion yuan ($235.9 billion) in the five years through 2015, the official Xinhua News Agency said today, citing the local government.

The investment will help Chongqing expand its total industrial output beyond 3 trillion yuan, the report said.

China’s industrial-output growth unexpectedly slowed in July to a three-year low while investment and retail sales missed estimates, raising pressure on Premier Wen Jiabao to step up efforts to support expansion. Chongqing’s industrial investment plan will focus on building seven “big manufacturing industries,” including electronic information, automotive, equipment and parts manufacturing, oil refining, material and energy industries, according to Xinhua.

The electronic information manufacturing industry, which includes notebook computers, will receive 300 billion yuan [US$47.2 billion] in investment, while the car-manufacturing industry will receive 200 billion yuan, Xinhua said.

The equipment manufacturing sector will get an investment boost of 250 billion yuan, and Chongqing’s oil and ethylene refining sector will receive 150 billion yuan, the report said.

Chongqing consolidating IT role: Party chief [Xinhua, March 22, 2012]

CHONGQING, March 22 (Xinhua) — Chinese Vice Premier Zhang Dejiang, newly appointed Party chief of Chongqing, has promised unremitting efforts to consolidate the municipality’s role as a global leader in information technology.

Zhang told visiting Acer President Jim Wong on Wednesday that Chongqing would ensure “continuity and stability in its reform and opening-up policies” so as to make the drive.

Zhang was appointed Party chief of Chongqing, replacing Bo Xilai, under a decision by the Communist Party of China Central Committee last Thursday.

“Chongqing will diversify and optimize its policies to improve its opening-up,” Zhang said, while emphasizing the importance of upgrading vocational and technical education to train high-quality professionals for foreign-funded IT firms in Chongqing.

Wong and hundreds of other senior executives from the world’s leading IT firms including Hewlett-Packard (HP) and Intel have gathered in Chongqing to attend the China International Expo of Cloud Computing, which opened here Thursday.

The three-day event features symposiums and exhibitions of new IT technology, products and services.

Wong said Zhang’s reassurance helped enhance investors’ confidence.

He said the company plans to build Acer’s manufacturing base in Chongqing into the world’s largest communication technology research and manufacturing center in two to three years.

Taiwan-based Acer is the world’s largest vendor of completed PCs and notebooks. Acer’s plants in Chongqing, which only commenced business in December 2010, realized an output of 5 million notebooks in 2011.

In the year, 35 percent of Acer’s global notebook shipments were supplied from Chongqing. Meanwhile, rival HP plans to have 60-70 percent of its notebook shipments supplied from Chongqing in future.

Chongqing mayor Huang Qifan also met the entrepreneurs on Wednesday, saying the city has become home to the world’s five leading notebook producers and six vendors, as well 500 suppliers of the sector.

The city had a total output of 25 million notebooks in 2011 and is aiming for an annual output of 100 million of the products in three years.

Chongqing laptop output among top 3 nationwide [CQNEWS, Dec 17, 2012]

The output volume of laptops, printers and LCD screens in Chongqing is expected to be among the domestic top 3, only second to Shanghai and Jiangsu, according to Chongqing Municipal Commission of Economy and Information Technology.

Five global laptop brands including HP and Acer have established factories or placed big processing orders in Chongqing; while the world’s top 5 original equipment manufacturers like Inventec and Foxconn have also invested here. In addition, some 705 more laptop supporting enterprises gathered in the city too. The “5+6+700” industrial chain of the laptop sector has taken shape in Chongqing.

Statistics show that Chongqing produced more than 35 million laptops from January to October, 2012, up 99% year on year. According to the current momentum, Chongqing will see the total output volume of laptops, printers and LCD screens respectively hit 45 million, 9 million and 9 million in 2012, which will all rank among the top three in China.

Trans-Eurasia railway connects China with Europe [Abdi Ali YouTube channel, March 19, 2013]

The Yuxinou Railway connects China with Europe by crossing the vast Eurasian landmass. The 11,179 kilometer Yuxinou International Railway line, often referred to as the modern Silk Road, starts in Chongqing in southwest China, crosses the Alataw Pass into Kazakhstan, and then moves through Russia, Belarus and Poland before arriving in Duisburg, Germany. The railway started operations in 2011. Unlike on previous trips which only transported products from China to Europe, for the first time, products have been brought back from Europe to Chongqing on the line. After a 17-day journey, starting from Duisburg, Germany, and passing through five countries, this valuable shipment of vehicle components has finally arrived at the Changan Ford Chongqing factory in China’s southwest. Since 2011, the rail line has transported more than 2.5 billion US dollars worth of products from China to Europe. Deputy Director of Logistics Council of the Chongqing Gov’t, Yang Liqiong, said, “If the trains arrive empty, it does not help us in reducing transportation costs, then it’s not conducive for the formation of the global trade link.” The rail line is vital for foreign companies operating in Chongqing and for western China’s economic development. “This is a cost effective way to bring goods out of and in to Chongqing. So in terms of the scale, and efficiency, especially the goods devalue costs of time, it’s critical for the infrastructure of the development of Chongqing,” said Henley Travis, VP of HP Asia Operations. According to the Ministry of Commerce, in the first three quarters of 2012, trade between China and the EU reached about 420 billion US dollars. China has been relying on its advantages in labor and resources to export manufactured products to Europe. The Yu-Xin-Ou has given significant advantages to Chongqing and to the economic growth of western China. After 2 years in operation, the Yuxinou Railway system has resolved customs clearance of each country along the way. Regular service sets the scene for Chongqing to become the distribution center of European trade with China. Experts stress that they will be aiming to reduce the logistic costs to enhance the line’s economic value this year.

Rail linking Europe expected to open up China’s less-developed West [Xinhua, July 2, 2011]

CHONGQING, July 1 (Xinhua) — A cargo train filled with laptops and LCD screens has left Chongqing, a mega-city in China’s less-developed western regions, starting its 13-day trip to Duisburg, Germany, which marks the official launch of the new transcontinental rail freight route.

The new rail route witnessed its official opening on Thursday night, after three test runs since March last year.

Clattering out of the station at about 9 p.m., the cargo train is set to travel 11,179 kilometers across the far western Xinjiang Uygur Autonomous Region, Kazakhstan, Russia, Belarus, Poland, before finally reaching Germany.

The route offers a major shortcut to the more traditional sea trade routes from Shanghai and Guangzhou, cutting travel time to Europe from about 36 days by container ship to just 13 days by freight train, said Huang Qifan, mayor of the inland business hub.

Huang said that the train is also safer and less expensive than sea transport.

Though the rails have been there for over ten years, the route is new as no train services linking Chongqing and Europe have been provided before due to complicated customs checks and cargo transfers, according to Ma Zhongyuan, director of Chongqing customs.

Last year, China signed a strategic agreement with Russia and Kazakhstan to open the new freight route, as the country is trying to build the inland labor-rich municipality into an international high-tech hub, especially for laptops.

Foxconn, the world’s biggest contract electronics supplier, Acer, Taiwan’s leading computer maker, and Hewlett-Packard(HP) are already in place in Chongqing to produce laptops.

In the first five months this year, Chongqing sold 2.43 million laptop computers abroad. The exports were valued at 840 million U.S. dollars, accounting for 20 percent of the city’s total export value.

The city’s export of new- and high-tech products totaled 14.26 billion in the period, up 182.5 percent year-on-year.

Officials believe the shorter transport time to Europe by railway will make made-in Chongqing notebook computers more competitive.

Last month, a new cargo air route also became available between Chongqing and the European cities of Moscow and Luxembourg.

The province-sized city is already a major transport center at the junction of China’s prosperous East and poorer West, as cargo can be sent out of Chongqing along the Yangtze River, the country’s longest waterway,via air and railway.

The new rail route will be used to link south China’s Pearl River Delta manufacturing hub and the country’s southwest industrial belt with Europe, officials said.

Just last mouth, a rail route connecting Chongqing and a port in the southern manufacturing hub of Shenzhen went into operation.

The transcontinental track will also boost trade between southeast Asia and the Europe, as railways have already linked Chongqing with the southwestern border province of Yunnan and Guangxi Zhuang Autonomous Region, said Cai Jin, vice president of the China Logistics and Purchasing Association.

Currently, the train only leaves Chongqing for Duisburg once a month, but train services may be increased to once per day in the future as the city’s exports to Europe increase, according to Huang.

Related:

Freight rail across Eurasia cuts travel time for trading goods between China, Europe

CHONGQING, May 10 (Xinhua) — A new freight rail has started operating across Eurasia, linking the southwest Chinese economic hub of Chongqing with the Port of Antwerp in Belgium and cutting the travel time for goods traded between China and Europe in half, officials said Tuesday.

The 11,179 kilometers of rail, running through Kazakhstan, Russia, Belarus, Poland, and Germany, was first used on March 19. Transporting goods from Chongqing to Antwerp on this route takes about 16 days, or half the time required for the goods to be transported by sea, Chongqing Mayor Huang Qifan told reporters. Full story

HP to continue with investments in China [Xinhua, Sept 23, 2010]

NEW YORK, Sept. 22 (Xinhua) — Hewlett-Packard Co. will expand its presence in China, Larry Irving, the company’s vice president for global government affairs, said on Wednesday.

“Our goal in China is to be a good partner in China, to bring more products to the Chinese market and to be a good employer as well,” Irving told Xinhua at the Clinton Global Initiative annual meeting in New York.

HP’s presence in China began in 1981 with the opening of the first China HP representative office in Beijing. After years of solidifying business relationship, China Hewlett-Packard, the first high-tech joint venture in China, was established in 1985.

Nowadays, HP is the second-largest PC maker and a leading foreign PC vendor in China.

Earlier this year, to bolster its presence in China, HP joined hands with China’s Chongqing to announce a plan to operate a 20,000-square-meter facility in the city, where it will make state-of-the-art notebook and desktop PCs.

Irving said HP will continue to invest in China.

“We have private conversation with the Chinese government, about our particular circumstances,” he added. “HP’s presence has been grown in China. We are making more investment in China, not less investment in China. We see China as a great opportunity.”

Chinese Premier Wen Jiabao said last week that China is committed to building an open and fair business environment for foreign investors.

“All foreign enterprises registered in China enjoy national treatment,” Wen said in a speech at the opening ceremony of Summer Davos 2010 in Tianjin.

Chongqing, Chengdu among top investment destinations in China: U.S. businessmen [Xinhua, Feb 4, 2010]

NEW YORK, Feb. 3 (Xinhua) — The southwestern Chinese cities of Chongqing and Chengdu are among the best investment destinations in that country, several U.S. business executives agreed.

“Chongqing and Chengdu have such huge population centers, so they have greater opportunities than many other places,” David J. Hofmann, director for North America at Inter-China Consulting, told the China Investment Strategies Conference held here Wednesday.

Chongqing and Chengdu have enough labor forces to support the economic sector, especially some export-led industries, according to Hofmann, whohas 30-year business experience in China.

The two cities are also good places for innovators as they boast rich talent potentials, he added.

There are good universities and well-educated students in Chongqing and Chengdu who can play the operating and managing roles for investors’ companies, said the business executive.

Hofmann was echoed by Gene Huang, chief economist and vice president of FedEx, who said China’s strategy to develop its western regions is very supportive for doing business in Chongqing and Chengdu, which would remain attractive for U.S. investors “for quite some time.”

President and co-CEO of Tishman Speyer Rob Speyer also agreed that there are enormous government investments in the two cities.

State councilor stresses technological innovation for Chongqing’s development [Xinhua, April 9, 2010]

CHONGQING, April 9 (Xinhua) — State Councilor Liu Yandong has called for more efforts in scientific and technological innovation to boost development in China’s Chongqing Municipality.

Liu made the remarks during a recent inspection tour of Chongqing, the only municipality in China’s central and western regions.

She said innovation in science and technology is crucial to combat the financial crisis, optimize industrial structure, adjust the economic growth mode, and to achieve fast development.

Liu urged the municipality to make breakthroughs in its pillar industries, strive to foster technology-intensive burgeoning industries of strategic importance, speed up its building of a science and technology innovation center and an industrial base to apply scientific research to industrial production.

During her inspection, Liu visited schools, scientific research institutes, high-tech companies and cultural institutions.

Disposable income rises for Chongqing’s relocated urban residents in Three Gorges areas [Feb 21, 2010]

BEIJING, Feb. 21 (Xinhua) — Disposable income was at 8,231 yuan (1,205 U.S. dollars) per capita in 2009 for Chongqing’s urban residents relocated to make way for the Three Gorges project, said the National Bureau of Statistics (NBS) of China Sunday.

The figure was 11.5 percent up from the previous year, according to a statement on the NBS website.

The growth could mainly be attributed to the steady rise in salaries as the local government had taken measures to increase employment opportunities for relocated residents, according to the announcement.

Sharp-er Hon Hai / Foxconn

March 31, 2012 6:28 pm / 2 Comments on Sharp-er Hon Hai / Foxconn

Update: IGZO: Vision for the Future [a special advertising section by sharpusa.com in The Wall Street Journal, Jan 7, 2013] which was timed for the CES 2013 opening and was used as a detailed landing site for banners put everywhere like here with view (Jan 20):

Powering the resolution revolution

Liquid crystal display (LCD) performance is about to take another leap forward. Existing LCDs have given us remarkable quality in HDTV, tablets and smartphones, as well as reasonably low power consumption. But Sharp Corporation is on the verge of delivering a new technology that will enable much higher resolution and significantly lower power consumption. More

The science behind the breakthrough technology

The hunger for display resolution will probably never be satisfied until displays are indistinguishable from a printed page and as nuanced as a watercolor. IGZO takes a large step in that direction by enabling very high pixel-per-inch counts on small displays and Ultra-High Definition on larger monitors, while retaining brightness. More

Inventing the future

The great thing about a technological breakthrough like IGZO is that it makes dreams come true. Yesterday’s dreams, today’s dreams, tomorrow’s dreams. More

Update: Capital Alliance with Qualcomm, Inc. and Display Technology Development Agreement with its Subsidiary Pixtronix, Inc. [Sharp press release, Dec 4, 2012]

Sharp Corporation (hereafter “Sharp”) today announced that the Company has reached an agreement with Pixtronix Inc. (hereafter Pixtronix), a subsidiary of Qualcomm Incorporated (hereafter “Qualcomm”, NASDAQ: QCOM), concerning the development of Pixtronix’s MEMS^*1 displays. In addition, Sharp signed the capital alliance agreement and will issue new shares by a third party allotment (hereafter “This Third Party Allotment”) with Qualcomm Incorporated, a world leader in 3G, 4G and next-generation wireless technologies, as the allottee.

MEMS display to be developed jointly by the two companies is a display using ultrafine process technology and existing display manufacturing infrastructure with features including high color reproducibility and low-power consumption. The development for commercialization of MEMS display will be achieved by integrating Sharp’s core display technology, IGZO^*2 and MEMS display technology of Pixtronix.

In addition, Sharp is planning to accept up to 9.9 billion yen^*3 from Qualcomm in equity investment to pursue this joint development. This capital will be used for the development of MEMS display and necessary capital investments related thereto targeting for the achievement of the technology for commercialization.

With this agreement, the two companies will consider the possibility of further collaboration of chipsets by Qualcomm Technologies, Inc., a wholly-owned subsidiary of Qualcomm Incorporated and IGZO-based display technology for lower power consumption and higher performance of mobile terminals.

With this agreement, Sharp will accelerate its strategy for growth in small- to medium- sized LCD business with IGZO-based display technology as its core, and expand its revenue and corporate value.

*1 MEMS: Micro Electro Mechanical Systems

*2 IGZO: IGZO (InGaZnO) is an oxide comprising indium (In), gallium (Ga), and zinc (Zn). A thin-film transistor using this material has been developed by Sharp in collaboration with Semiconductor Energy Laboratory Co., Ltd. (a company based in Kanagawa, Japan, and led by President Shunpei Yamazaki)

*3 Equivalent to 120 million U.S. dollars calculated by exchange rate of December 3, 2012

Summary of the joint development and capital alliance

1. Development for the Commercialization of Next Generation Display

The next generation display will be jointly developed integrating Sharp’s IGZO-based display technology and Pixtronix’s MEMS display technology. The joint development will establish facilities in the LCD panel plant in Sharp Yonago Corporation (location: Yonago city, Tottori prefecture, Japan) for development of the technology for commercialization.
The development for next generation displays and necessary investment will begin immediately. At the point when the development of the technology for commercialization is confirmed to be feasible, we will move to the next stage by implementation of equipment targeting to achieve mass production technology.

2. This Third Party Allotment
Sharp will issue new shares by third party allotment with Qualcomm as the allottee by each stage of joint development of the technology for commercialization. The second stage is contingent upon achieving certain milestones.

<Notice Regarding the Execution of Capital/Business Alliance Agreement with Qualcomm (US Company) for the Joint Development of Next Generation MEMS Display and the Issue of New Shares by Third Party Allotment (PDF:83KB)>
http://sharp-world.com/corporate/ir/topics/pdf/121204.pdf

Update: Foxconn aims to land iTV orders by investing in Sharp, says CMI former executive [DIGITIMES, June 29, 2012]

Foxconn Electronics’ investment in Sharp is aimed at securing iTV orders from Apple, which will be a positive development for the flat panel industry if the strategy works, according to Ho Chao-yang, former president of Chimei Innolux (CMI) [also controlled by Foxconn] and current chairman of Chi Mei Materials Technology.

It is a win-win strategy for Foxconn and Sharp, and the tie-up is believed to be able to create new markets, Ho stated.

In addition to benefiting the flat panel industry, the launch of iTVs will also benefit polarizer makers, including Chi Mei Materials, Ho added.

Chi Mei Materials posted net profits of NT$1.43 billion (US$47.73 million) or an EPS of NT$3.37 in 2011.

Foxconn [Hon Hai] `Gamble’ on Sharp an Apple TV Bet [Bloomberg YouTube channel, March 28, 2012]

March 28 (Bloomberg) — Pelham Smithers, managing director of Pelham Smithers Associates, discusses Foxconn Technology Group’s 133 billion yen ($1.6 billion) investment in Sharp Corp. He speaks with Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg).

[0:07] Q: WHY WOULD YOU WANT TO BUY A COMPANY WHO LAST MONTH FORECASTED A RECORD 290 BILLION YEN LOSS FOR THE FISCAL YEAR? NOT THE COMPANY BUT A 9.9% STAKE. A: Because there is one lovely gem in that business, which is the 10G LCD manufacturing plant in Sakai. This is the only one of its type. It’s probably going to be the only one of its type. It is the most efficient plant at making 60-inch TV screens and as such, it could be the future of smart television.

Q: AND THE FUTURE OF SMART TELEVISION MIGHT BE THIS ADVANCED SCREEN TECHNOLOGY CALLED IGZO. … A: IGZO is a transparent semiconductor device. So what this means is that one day you could be looked in window, switch on a button and suddenly turn it into a television because all the transistors are transparent. And that is seen as the future of television for variety of different reasons. It is very efficient, electricity passes very quickly through, so there is no loss of power, it’s very thin, very flexible, and it leads very nicely from LCD into AMOLED. [1:26]

… [1:41] I think they [i.e. Sharp] have sold a lot of their future to survive today. This is a very, very good deal for Foxconn because it gets them firmly into the TV side of the Apple pipeline. [1:53]

… [2:03] It is a gambling in that regard. But if anybody knows what Apple is going to be up to in the future, it’s Hon Hai, who makes or fabricates lots of Apple products. So they’ve come in and they’ve made this decision that if it’s not Apple than it is probably somebody else. [2:20] …

Updates: Hon Hai Estimated to Ship Some 10 Million LCD TVs This Year [CENS, May 8, 2012]

[The Shanghai office of the] Market research firm DisplaySearch [in preparation to the 2012 China Smart TV and Smart Display Conference] estimated Hon Hai Precision Industry Co., Ltd., currently the world’s No.1 contract electronics manufacturer, to ship close to 10 million LCD TVs this year thanks to hefty contracts from Sony and Sharp.

Sony has contracted Hon Hai to supply eight million TVs while Sharp has designated the contract supplier to ship 1.5 million TVs this year. Hon Hai has acquired many of Sony’s overseas factories and bought into Sharp in order to secure steady contracts with the two brand name suppliers.

People say Hon Hai is likely to acquire Sharp’s TV factories in mainland China, Indonesia and Mexico to expand its contract TV manufacturing capacity.

Sharp plans to deliver 12-13 million TVs this year while Sony projects to ship 19 million TVs. Both companies will ramp up outsourcing.

As Hon Hai is the primary recipient of the contracts, other contract suppliers like Wistron Corp. are estimated to receive reduced number of contracts from the two companies. Wistron is projected to ship 4.8 million TVs this year, around half the number it shipped last year.

Hon Hai is posing a challenge to the world’s No.1 contract supplier TPV Technology Corp. with the bright shipment estimate. TPV shipped 13-14 million LCD TVs last year to big-name suppliers including Philips, Sony, Vizio, Best Buy, TCL and Skyworth. Its 2012 shipment is projected at 15 million systems.

Compal Electronics Inc. has put its 2012 shipments of LCD TVs at eight million systems mostly thanks to contracts from Toshiba, which will increase outsourcing to 70% of its output this year.

Samsung also revises strategy to begin outsourcing the TVs, planning to depend on contract suppliers for around 30% of its total output this year. This year alone, the company aims to ship 45 million LCD TVs.

– Special analysis: Hon Hai into sharp and subsequent effects [DisplaySearch Shanghai office press release, May 3, 2012] as traslated by Bing (or the alternative translation by Google)

NPD DisplaySearch Shanghai Office, May 3, 2012-the flat panel display industry as a whole in the near future the most shocking news is Hon Hai into sharp’s investment. Be held in Shenzhen on May 24- DisplaySearch 2012 smart TVs in China Summit Forum [see the English version of 2012 China Smart TV and Smart Display Conference]will provide an in-depth analysis of industry news and discussion between participants and Panel and an oversized TV Panel development trends. For more details, please refer to the official Web page of the Conference www.DisplaySearch.com.CN.

On March 27, 2012, Hon Hai and sharp have announced the following two types of investment decisions.

Hon Hai gets sharp will invest 800 million dollars approximately 11% shares, Hon Hai also became sharp’s largest shareholders, this will ensure that the Hon Hai can be directly involved in operation sharp liquid crystal display sector and related technology research and development projects.
Hon Hai gets sharp to invest about 800 million dollars in Japan, Sakai 46.5% stake in ten lines, thus ensuring that Hon Hai can has about half of the ten generations line capacity and ownership of the output panel products.

After the investment of the sharp, Hon Hai in the two panel manufacturers in the possession stakes: Chimei 12% equity 10% equity and sharp. Our blog posts in March 27, 2012 (DisplaySearch Blog) , “Hon Hai investments Sharpe-10 line joined the competition with Samsung and LG” (Hon Hai Invests in Sharp’s Gen 10 – Joining to Compete with Samsung and LG) have discussed the background and impact of this massive investment, further analysis of this article will be on the …

Hon Hai and before its investment stake among panel makers Chi Mei, has established in the past a number of strategic alliances with the sharp, specific terms are the following several points:

Hon Hai was sharp LCD module Assembly contract manufacturer.
Sharp UV2A photo distribution to it by technology licensing technology licensed to Chi Mei, sharp has helped us improve and odd in Taiwan 7 ‘s and 8 ‘s line of light distribution to the production process of climbing.
Sharp LCD TV OEM business orders it to the company.
Chi Mei started to supply some not for the production of the sharp LCD sharp LCD TV.This sharp 8 generations it wire into metal oxides (Oxide TFT) production process and the capacity utilization rate of 10 lines to reduce gradually increased.
Hon Hai is a major machine-Assembly of the Apple iPhone and iPad. At the same time, sharp is a major Panel suppliers for iPhone and iPad. Both have worked closely together to address the production of Apple mobile phones and tablet computers and technology issues.
Hon Hai is also a main unit of the Sony LCD TV Assembly; at the same time Sony purchased from a sharp LCD TV panels, mainly sharp 10-generation production line of 40-inch and 60-inch Panel and Panel provides to its television assembly plant for Assembly. In other words, sharp and Hon Hai on Sony LCD TV products to cooperate on the project with indirect relationship.

Taking into account these relationships, you can guess Hon Hai and sharp through both direct and indirect cooperation for a long time on the other side there is a certain understanding. This fusion of the two companies ‘ corporate culture would be very helpful.

Hon Hai into sharp and influence

Once the company into sharp, lots of new status will appear. Direct effect is Hon Hai will obtain sharp 10 lines of a large production capacity, as well as many leading LCD Panel sharp technology. With such huge sums of money into, Sharpe must also be able to improve its financial position and balance of expense reports. According to our analysis, there will be the following:

50% 1, Hon Hai will obtain sharp 10 lines of capacity control

LCD TV market in the current situation, sharp 10 line capacity utilization has been poor.Its total capacity is 10 lines 72K mother glass into a month, but Sharpe has been unable to get enough orders to meet the maximum capacity, capacity utilization is not high.Sharp 10 lines are now mainly produce 40-inch, 60 and 70 inch panel products, but in the first quarter of this year, only input 42k of glass per month. And sharp originally planned in two or three quarters of this year reduced input to 35~36k per month with a minimum of cost. After the arrival of Hon Hai will be by looking for more orders to meet the remaining close to half of the capacity requirements. At the same time, 40-inch, 60 and 70 inch does not singularly American TV panel production within product list, so relatively speaking on the impact of the Chi Mei is also relatively small.

Table a, sharp 10-generation size glass line inputs (in thousands of pieces/month)

Data source: Quarterly Large-Area Production Strategy Report , Q2’12-Q4’12 to forecast values

Table II, sharp glass 10 lines into the size ratio

Data source: Quarterly Large-Area Production Strategy Report, Q2’12-Q4’12 to forecast values

2, the company will expand sharp’s LCD TV manufacturing

Company plans produce 9.5 million in 2012 LCD TV sets, including 1.5 million of the 8 million units of Sony and sharp. Hon Hai was a few years ago Sony and Sony’s LCD TV assembly line production. With sharp Panel capacity and technology, Hon Hai will expand its OEM business. Sharp LCD 2012 TV shipments expected to reach 1,200 to 13 million units, in other words 1.5 million accounted for 12.5% of the Hon Hai worker, compared to the last quarter of 2011 only 3.2% sharp LCD TV is Hon Hai worker, has a good growth. If Hon Hai is sharp more OEM orders, TPV and other contract manufacturer Wistron orders will be directly affected.

Table three, sharp LCD TV manufacturer and percentage list (Q4’11)

Data source: Quarterly LCD TV Value Chain Report

3, Hon Hai will contact sharp many industry-leading Panel technology

Not only large-size LCD Panel technology, Hon Hai will also get sharp’s small and medium size panel technology and mobile devices. As sharp’s largest shareholder, Hon Hai will be greater use of sharp’s reserves of power engineering technology to strengthen its display technology. These technologies include LTPS (low temperature poly silicon, sharp called the CGS), oxide TFT,UV2A,RGBY the four panels of the color spectrum, and a number of other important related technologies. Hon Hai’s need to leverage these technologies to assist them in deep in China Shenzhen Super 5 line shifts from amorphous silicon to LTPS process and Hon Hai in Chengdu city LTPS 6 generations of the construction of a new line-Tianyi display 6 generations line of science and technology, these technologies will help a lot. Rumor has Apple will launch a new display technology used in LCD TV products, Hon Hai can also use a sharp order to win Apple’s advanced technology projects. Even more interesting is that shown in the following figure, Sharpe is also a major patent holders of the naked-eye 3D technologies, which would also become a major advantage of Hon Hai.

Figure, naked-eye 3D technology patent ownership

Data source: Synergytek Consultancy

4, Hon Hai will be on material procurement of parts and components to help sharp

Hon Hai to components suppliers, strong negotiating abilities known to the industry. In his intervention after sharp 10-line operation, Hon Hai is its powerful procurement negotiation skills can also be used to assist the sharp reduction of parts procurement costs.

5, the Chi Mei will benefit from Hon Hai and sharp’s new relationship

Chi Mei was originally through the payment of licensing fees, Forms Panel gets sharp UV2A technology production and supply to the sharp. After this investment, the company also owns shares of the two companies and 12%, Hon Hai will have the opportunity to coordinate between the two companies, greater support of Chi Mei to get sharp, even you can reduce licensing costs and sharp agreement to pay.

6 Panel, sharp will be able to get more customers

Sharpe has been dominated by self production, its LCD TV panels from the main internal supply. In the past, sharp had planned to rely on its strong customer base high-generation panel production capacity expansion, but sharp panel facing a Terminal product under the brand over competitors ‘ challenges. Currently main supply Panel for sharp TV sharp, Philips, Samsung, Sony, TPV and (as described in the following table), Hon Hai after intervention, Hon Hai helps Sharpe to find more customers. However, because there is a competitive relationship between, Hon Hai allows sharp continues to supply to Samsung and TPV would face uncertainty. In addition, Philips and TPV TPVision has a joint venture, and TPV compete on many OEM business with Hon Hai, so delicate.

Table four, first quarter of 2011 sharp LCD TV Panel’s main customers

Data source : Quarterly LCD TV Value Chain Report

Hon Hai and sharp the next possible courses of action

Analysis and judgment based on NPD DisplaySearch, we believe that the Hon Hai will then take the following action:

Hon Hai could get further sharp located in China, Indonesia and Mexico’s TV manufacturing plant. After getting these manufacturing plants, Hon Hai will also further consolidate its important position in the Sharpe television manufacturing business.
North America’s leading brand of LCD TV Vizio may balance Hon Hai and sharp’s resources in an attempt to form a new supply chain, and this will also help to Vizio in markets such as China and Europe have more choices. Vizio LCD TV OEM customers currently Hon Hai. This investment Vizio can seek more flexible company and Sharpe’s contract manufacturing and supply Panel. Sharp 60 inch to 70 inch Vizio to enrich their product lines are also useful.
Hai dedicated business team formed to sharp 10-line business and plant operations.Sharpe 10 lines for the business group supply and capacity allocation, customer choice, Panel pricing and so on all have the right to decide; 10 lines of course they also need to be responsible for the sales and financial performance. Therefore, Hon Hai for sharp TV’s growth in the global market will have a significant impact. Hon Hai was also needed on the productivity of 10 lines to maintain a higher capacity utilization and rational distribution planning is responsible for.
The company want to optimize the productivity of 10 lines, and clearly is the best cut of 10 lines of products are more than 60 products. Target customers will be sharp, Vizio (60 and 70 inch), Sony (60 inch), Panasonic (60 inch) and channel in mainland China customers (such as SUNY), Vizio, and so on. Now sharp Samsung 60 inch LCD TV Panel supplier, the future is likely to gradually fade. Therefore, Samsung may have alternative sources of supply for its 60-inch TV Panel.
Samsung on a 60 inch TV products may be forced to only get a supply from Samsung Panel, Samsung will also focus on the 65-inch, 65 inch Panel can have friends, strange, after all, in the United States, BoE and Panda, and many other vendors.
In order to promote its 60-inch product, best time will be the second half of 2012 television season, especially the November Black Friday sales season in North America.Therefore, Hon Hai will begin and the 60 inch product strategy 10 lines of its potential customers to discuss possible cooperation plan. Example is most likely cooperation, sharp panels and company Foundry manufacture mode of cooperation, between October and November this year in terms of costs and prices to attract customers.This terminal products price LCD TV market this year will have a certain effect.

The impact on other television brands and contract manufacturers

Before the Hon Hai to fund, sharp selling its 10 lines for production of 60-inch products are very positive. For example, in last year’s Black Friday sales in North America, sold its 60-inch LCD TV CCFL Backlight only $ 999. Now with Hon Hai’s power, sharp 60 inch product pricing strategy may be more active.

Hon Hai-sharp Alliance will lead to more intense competition, and also brought more price cuts urge the whole supply chain. Sharp in 2011 in North America and Europe by the end of the 60-inch low-price policy has caused a certain amount of pressure on competitors, already there are concerns in the industry now, price wars in particular, more than 60 inch price war, teamed up with Hon Hai and sharp and is only just beginning, and not what we want to become relaxed.

Of course, Hon Hai and more than 60 inch sharp product policy also means that 60-inch product penetration will further improve in the world, particularly in China and the United States market. Hon Hai to sharp’s investment will also affect other contract manufacturers such as performance of the TPV and Wistron. Now with sharp panel power, Hon Hai in the foundry business will be even more powerful.

For more industry news, master the first flat-panel displays and television industry development and welcome to NPD DisplaySearch 2012 China smart TV Forum .Conference invite the leading television brands, Panel manufacturers, operators and technical programmes, covering Intelligent interactive, 3D TV and flat panel industry and networking with naked-eye 3D, AMOLED, LED backlight, TV technology and market value chain. Global sound control, smart synchronization procedure and intuitive man-machine interface control lead program Nuance, Flingo and Hillcrest Labs is also a keynote speech. In addition, NPD DisplaySearch special brings 2012 global TV for consumer survey results to share, as well as the analysis of the usage of network TV and 3D TV.

Welcome to enjoy early bird discount prices, costs include the two-day meeting of the Conference, information (including USB), afternoon refreshments and VIP dinner, is an extension of your contacts, listen to different views and ideas best occasion for policy.For more details, please refer to the Conference Web site www.DisplaySearch.com.CN,or please contact Shanghai offices.

Contact window:
Luo Mei-Director of marketing, DisplaySearch China

Phone: +86-21-62752555

Mobile phone: +86-139-1738-2072

Fax: +86-21-32097567

E-mail: michelle.lo@displaysearch.com

Company Web site: www.displaysearch.com.cn

– Commentary: The battle cry in the global LCD TV market [DIGITIMES, May 4, 2012]

– CEC-Panda, TPV to jointly set up 10G LCD panel line in Nanjing [DIGITIMES, May 4, 2012]

China-based CEC-Panda LCD Technology and Top Victory, a subsidiary of TPV Technology, will jointly invest CNY35 billion (US$5.57 billion) to set up a 10G line for the production LCD panels. CEC-Panda will take up a 99.2% stake in the 10G line, according to an announcement by the companies.

The 10G line will focus on the production of large- and ultra large-size LCD panels for local brand TV vendors in China.

TPV said the establishment of the 10G plant will save a substantial amount of import tariffs due to the local availability of large-size TV panels in China, while strengthening its global competitiveness.

The 10G line has a cost advantage for the production of large-size panels, according to industry sources. Glass substrates at the 10G line can be cut into eight units of 60-inch TV panels compared to a yield of three units from the 8.5G lines at Samsung Electronics and LG Display, the sources indicated.

However, Taiwan-based panel makers are currently reluctant to commit investments on 10G lines due to heavy capital requirements and the financial strain, the sources commented.

– TPVision [TP Vision] likely to showcase OLED TVs in 2012 IFA, say sources [DIGITIMES, April 17, 2012] TP Vision

TPV Technology has finished a takeover of LCD TV business operations from Philips through the establishment of a joint venture, TPVision [TP Vision], which is expected to showcase OLED TVs at the 2012 IFA consumer electronics trade fair to take place in Berlin, Germany from August 31-September 5, according to industry sources.

TPVision [TP Vision] is likely to purchase large-size OLED panels from LG Display for its production of OLED TVs, the sources noted.

For 2012, TPVision [TP Vision] will continue to launch a series of high-end LED, 3D, and smart TVs under the Philips brand, including the Philips 3500, 4000, 6000 and 7000 lineups, said the sources.

In China, TPVision [TP Vision] will release the 5-series of Philips-branded models, including PFL5825, 5820 and 5721, supporting Philips’ Ambilight and AmbiwOOx technologies, added the sources.

– Increased competition in TV sector as Korean brands promote OLED TVs [DIGITIMES, April 30, 2012]

Competition in the TV sector is continuing to grow as Korean firms are reporting increased sales and developing their TV technology.

Samsung Electronics’ consumer electronics business, which includes TVs, saw its operating profits grow 550% on year to US$467 million in first-quarter 2012 as Smart TV and LED TV sales increased. This is mostly in part because of the firm’s success in commercializing technologies for Smart TVs, OLED TVs and direct-type LED TVs, commented industry observers.

Despite Japanese brands designing TVs that have 3D and Internet connection features, Korean-brand TVs have better voice-controlled functions and are more advanced with OLED technology, added the sources.

With Samsung setting a shipment of 48 million LCD TVs, and LG Electronics 46 million for 2012, the target of Sony, the third laregest TV vendor in 2011, is only 20 million units. Sony says its focus has shifted from boosting unit shipments to providing high value added products.

However, Samsung is set to merge its subsidiaries, Samsung Display, Samsung Mobile Display and S-LCD into one for OLE technlogy development, with the sources saying OLED technology mature may not mature until 2013-2014. However, the sources said Korean manufacturers will get the upper hand on the OLED industry before Japanese and Taiwan brands, which will pose challenges in the market.

– China TV firms see increasing sales as domestic demand heats up [DIGITIMES, May 7, 2012]

China TV firms have overtaken Japanese and Korean ones in China’s market as Chinese consumers are increasingly purchasing LCD TVs.

Sources said China brands are pushing their products domestically mainly in third- and fourth-tier cities as populations there are seeing economic growth.

Chinese brands have smart TVs similar to Korean and Japanese brands with functions such as voice control and cloud computing, and they have price advantages over Japanese and Korean ones, making their TVs a popular choice for domestic consumers added sources.

Chinese brands are looking to become more competitive by putting more added value features in their products and are figuring out strategies for expanding sales abroad amongst Korean firms pushing their OLED technology and Japanese firms lowering prices for high-end LCD TVs.

Display Research, however, stated that China’s market will see a big shift in 2012 as past government subsidies for purchasing new energy efficient TVs have already expired, making China’s TV brands more reliant on what kind of competitive edge they can offer for consumers.

– Foxconn may receive large-size TV orders from Vizio, say sources [DIGITIMES, May 7, 2012]

Foxconn Electronics is likely to also land large-size OEM TV orders from Vizio in addition to existing clients including Sharp and Suning Appliance after it took up a 46.5% stake in Sharp’s 10G LCD panel line, according to industry sources.

The inclusion of Vizio into the Sharp-Foxconn alliance is also expected to result in a reduction in shipments of 60-inch TV panels to Samsung Electronics, which has been counting on Sharp and in-house facilities for the supply of large-size panels, the sources indicated.

The possible shift of shipment policy at Sharp will force Samsung to focus on 65-inch products with the 65-inch panels coming from AU Optronics (AUO), Chimei Innolux (CMI) or even BOE Technology, the sources noted.

Foxconn is expected to see its shipments of OEM TVs reach 10 million units in 2012, including eight million units to Sony, 1.5 million units to Sharp and the remaining to Panasonic, Vizio and Suning, said the sources.

Foxconn’s increasing shipments of OEM TVs will also affect rival company Wistron, which is expected to see its OEM TV shipments slide to five million units in 2012 compared to eight million in 2011, the sources estimated.

End of Updates

Sharp Sells Stake to Hon Hai [Foxconn] [WSJDigitalNetwork YouTube channel, March 27, 2012]

Discussion with George Stahl, Dow Jones Newswires Managing Editor, and Michael J. Casey, Dow Jones Newswires Managing Editor

Sharp Establishes Strategic Global Partnership with Hon Hai Group [Sharp press release, March 27, 2012]

Sharp Corporation (hereinafter “Sharp”) entered into agreement today with Hon Hai group, the world’s leading EMS (electronic manufacturing service) company, to establish strategic global partnership to collaborate in various business fields, and to issue new shares to Hon Hai group through third-party allotment (hereinafter “the issuance of new shares through third-party allotment”).

The market surrounding electronics industry is becoming severe, with rapid price decline due to the development of digital technology and increasing competition in a global market. We believe the timely action is necessary to tackle these changes in the market.

Looking at the business environment, Hon Hai Precision Industry, the key company of Hon Hai group, saw Sharp’s LCD technology with high reputation, and decided to procure ultimately up to 50% of large-size LCD panels and LCD modules manufactured at the LCD panel plant in Sakai-city, Osaka, Japan. The LCD panel plant will be mutually managed by one company set by partner companies.

In addition, this partnership allows each company to establish a new business model, combining each company’s strength, to launch cost competitive component and products fit to market demand by utilizing Sharp’s potential for the development of one-of-a-kind components and products with Hon Hai group’s mounting technology and cost competitiveness.

Sharp plans to enhance this partnership by broadening the collaboration field, to allocate funds received from Hon Hai group by the issuance of new shares through third-party allotment, to the investment for the new technology introduction, to increase mid-and long- term profitability, and to strengthen competitive edge in the global market.

Overview of Strategic Partnership

1. Stabilize LCD panel plant operation in Sakai and strengthen cost competitiveness by purchasing power of Hon Hai Precision Industry

Hon Hai Precision Industry will procure ultimately up to 50% of LCD panels and LCD modules manufactured by SDP. Both companies will mutually take in part of the management through one company set by partner companies, which enables stable operation of the LCD panel plant in Sakai.

The two companies will take advantage of the economy of scale and material procurement in LCD panel and LCD TV fields, and will further enhance cost competitiveness in the global market.

*Share holding rate of SDP:
Current status:
Sharp:   Approx. 93%
Sony:   Approx. 7%
After signing the partnership:
Sharp:   Approx. 46.5%
Terry Gou and others including investment corporations:   Approx. 46.5%
Sony:   Approx. 7%

2. The issuance of new shares to Hon Hai group through third-party allotment

Sharp will issue new shares to Hon Hai group through third-party allotment (the number of new shares to be issued: 121,649,000 shares)

*The issuance of new shares through third-party allotment and share holding rate after the issuance of new shares:
Hon Hai Precision Industry Co., Ltd.:   4.06%
Foxconn Technology Co., Ltd.:   0.65%
Foxconn (FAR EAST) Limited:   2.53%
Q-Run Holdings Limited:   2.64%
[Total of 9.88%]

Source information is from: Issuance of New Shares Through Third-Party Allotment Associated with Business Alliance and Partial Transfer of Shares in Subsidiaries [Sharp Corporation, March 27, 2012] as per the following essential details compiled from that:

Capital Increase Through Third-Party Allotment (no director from Hon Hai is scheduled to be dispatched as of today in association with the Capital and Business Alliance): with issue price of 550 yen per share

Hon Hai Precision Industry Co., Ltd ([also known as Foxconn, http://www.foxconn.com/] represented by chairman: Terry Tai-Ming Gou)

– major shareholder and ratio of shareholding: Terry Tai-Ming Gou 12,02%

– 50,000,000 shares [27,500 million yen = US$ 332.0M]

Foxconn Technology Co., Ltd (represented by president: Lin, Don-Lang)

– [as per Businessweek: engages in the design sales and manufacturing of Mag/Al casing and mechanic parts primarily in Taiwan. It also involves in the design sales and manufacturing thermal modules for O/T, NB, server, and other 3C products. In addition, the company engages in the design sales and assembly of consumer electronic products.]

– major shareholder and ratio of shareholding: Hon Hai Precision Industry Co., Ltd 10,09%

– 8,029,000 shares [4,415,950 thousand yen = US$ 53.3M]

Foxconn (FAR EAST) Limited (represented by directors: Yu Huang, Chiu-Lian, Lee Jin-Ming)

– [as per Annual Report for 2010: Investment holdings in Mainland China, Europe and North America and Hong Kong electronics manufacturers*]

– major shareholder and ratio of shareholding: Hon Hai Precision Industry Co., Ltd 100%

– 31,143,000 shares [17,128,650 thousand yen = US$ 206.8M]

[*for Hon Hai Precision Industry Co., Ltd and subsidiaries consolidated]

Q-Run Holdings Limited (represented by director: Lee Han-Ming)

– [as per Businessweek: through its subsidiaries manufactures and distributes computer thermals and hardware parts]

– Foxconn Technology Co., Ltd 100%

– 32,477,000 shares [17,862,350 thousand yen = US$ 215.6M]

Total: 121,649,000 shares[66,906,950 thousand yen = US$ 807.7M]

Transfer of Shares in a Subsidiary: Sharp Display Products Corporation

Terry Gou (Terry Tai-Ming Gou):

– 1,320,000 shares providing a holding rate of 46.48%

(Sharp Corporation the same 46.48%, Sony Corporation 7.04%)

– Transfer price: 66,000 million yen [US$ 796.8M]

(as per the registered capital: 6,972 million yen [US$ 84.2M])

Sharp and Sony Amend Agreement Regarding Joint Venture to Produce and Sell Large-Sized LCD Panels and Modules [Sharp press release, March 28, 2012]

Sharp Corporation (“Sharp”) and Sony Corporation (“Sony”) announced that they have agreed to further amend the joint venture agreement originally executed by the parties in July 2009, as amended in April 2011, for the establishment and operation of Sharp Display Products Corporation (“SDP“), a joint venture to produce and sell large-sized LCD panels and modules.

Pursuant to the April 2011 amendment, Sharp and Sony discussed possible further contributions by Sony to SDP, but they have agreed that Sony will not make additional capital injections to SDP. The parties have also agreed to set a new time period, up to the end of September 2012, to permit study of the future direction of the joint venture, including with respect to the treatment of the shares that Sony has in SDP (7.04% of all issued shares) and possible purchases of large-sized LCD panels and modules. Under the March 2012 amendment, Sony may require that Sharp acquire all of Sony’s shares in SDP, even before the end of September 2012, upon the occurrence of certain events such as a transfer by Sharp to any third party of some or all of the shares that Sharp has in SDP.

On July 1, 2009, Sharp transferred its LCD panel plant in Sakai City, Osaka Prefecture, to SDP. On December 29, 2009, Sony invested 10 billion yen into SDP in exchange for new shares issued by SDP to Sony (representing 7.04% of the issued shares in SDP) and, as a result, SDP became a joint venture company of Sharp and Sony. Since then, Sharp and Sony have continued discussion about possible further contributions by Sony to SDP.

Shrinking capital investment in the worldwide LCD industry

January 2, 2012 5:51 pm / 1 Comment on Shrinking capital investment in the worldwide LCD industry

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.

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)

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.

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Since the ODMs and related upstream suppliers are already facing labor shortages during the slow season (the first half) of 2013, the sources are concerned that the shortages will become more serious in the second half.

Acer’s 7-inch entry-level tablet is also suffering from unstable supply due to a labor shortage at component suppliers.

Quanta Computer plans to move all its notebook production except those for Apple, to its plants in Chongqing in 2013. Compal Electronics will shift 90% of its notebook capacity to Chongqing plants and will expand capacity in the second quarter.

FLA REPORT SHOWS SOME POLICY CHANGES AT FOXCONN BUT FEW IMPROVEMENTS FOR WORKERS [Students & Scholars Against Corporate Misbehavior, Aug 24, 2012]

SACOM reiterates that factory inspection alone cannot eliminate labour rights violations. A democratic trade union trusted by workers is the most sustainable solution towards decent working conditions.

Dear Apple’s shareholders,

The centralization of notebook capacity in Chongqing and Chengdu has prompted component providers to consider moving production to the western regions of China as well.

The sources said the labor cost in inland China is relatively low compared to coastal regions but the transportation cost remains high. So far the cost difference in transportation has been subsidized by the local government but no one knows when the subsidy might end, the sources added.

The new rail route witnessed its official opening on Thursday night, after three test runs since March last year.

Clattering out of the station at about 9 p.m., the cargo train is set to travel 11,179 kilometers across the far western Xinjiang Uygur Autonomous Region, Kazakhstan, Russia, Belarus, Poland, before finally reaching Germany.

The route offers a major shortcut to the more traditional sea trade routes from Shanghai and Guangzhou, cutting travel time to Europe from about 36 days by container ship to just 13 days by freight train, said Huang Qifan, mayor of the inland business hub.

Huang said that the train is also safer and less expensive than sea transport.

Though the rails have been there for over ten years, the route is new as no train services linking Chongqing and Europe have been provided before due to complicated customs checks and cargo transfers, according to Ma Zhongyuan, director of Chongqing customs.

Last year, China signed a strategic agreement with Russia and Kazakhstan to open the new freight route, as the country is trying to build the inland labor-rich municipality into an international high-tech hub, especially for laptops.

Foxconn, the world’s biggest contract electronics supplier, Acer, Taiwan’s leading computer maker, and Hewlett-Packard(HP) are already in place in Chongqing to produce laptops.

In the first five months this year, Chongqing sold 2.43 million laptop computers abroad. The exports were valued at 840 million U.S. dollars, accounting for 20 percent of the city’s total export value.

The city’s export of new- and high-tech products totaled 14.26 billion in the period, up 182.5 percent year-on-year.

Officials believe the shorter transport time to Europe by railway will make made-in Chongqing notebook computers more competitive.

Last month, a new cargo air route also became available between Chongqing and the European cities of Moscow and Luxembourg.

The province-sized city is already a major transport center at the junction of China’s prosperous East and poorer West, as cargo can be sent out of Chongqing along the Yangtze River, the country’s longest waterway,via air and railway.

The new rail route will be used to link south China’s Pearl River Delta manufacturing hub and the country’s southwest industrial belt with Europe, officials said.

Just last mouth, a rail route connecting Chongqing and a port in the southern manufacturing hub of Shenzhen went into operation.

The transcontinental track will also boost trade between southeast Asia and the Europe, as railways have already linked Chongqing with the southwestern border province of Yunnan and Guangxi Zhuang Autonomous Region, said Cai Jin, vice president of the China Logistics and Purchasing Association.

Currently, the train only leaves Chongqing for Duisburg once a month, but train services may be increased to once per day in the future as the city’s exports to Europe increase, according to Huang.

Related:

CHONGQING, May 10 (Xinhua) — A new freight rail has started operating across Eurasia, linking the southwest Chinese economic hub of Chongqing with the Port of Antwerp in Belgium and cutting the travel time for goods traded between China and Europe in half, officials said Tuesday.

NEW YORK, Sept. 22 (Xinhua) — Hewlett-Packard Co. will expand its presence in China, Larry Irving, the company’s vice president for global government affairs, said on Wednesday.

“Our goal in China is to be a good partner in China, to bring more products to the Chinese market and to be a good employer as well,” Irving told Xinhua at the Clinton Global Initiative annual meeting in New York.

HP’s presence in China began in 1981 with the opening of the first China HP representative office in Beijing. After years of solidifying business relationship, China Hewlett-Packard, the first high-tech joint venture in China, was established in 1985.

Nowadays, HP is the second-largest PC maker and a leading foreign PC vendor in China.

Earlier this year, to bolster its presence in China, HP joined hands with China’s Chongqing to announce a plan to operate a 20,000-square-meter facility in the city, where it will make state-of-the-art notebook and desktop PCs.

Irving said HP will continue to invest in China.

“We have private conversation with the Chinese government, about our particular circumstances,” he added. “HP’s presence has been grown in China. We are making more investment in China, not less investment in China. We see China as a great opportunity.”

Chinese Premier Wen Jiabao said last week that China is committed to building an open and fair business environment for foreign investors.

“All foreign enterprises registered in China enjoy national treatment,” Wen said in a speech at the opening ceremony of Summer Davos 2010 in Tianjin.

NEW YORK, Feb. 3 (Xinhua) — The southwestern Chinese cities of Chongqing and Chengdu are among the best investment destinations in that country, several U.S. business executives agreed.

“Chongqing and Chengdu have such huge population centers, so they have greater opportunities than many other places,” David J. Hofmann, director for North America at Inter-China Consulting, told the China Investment Strategies Conference held here Wednesday.

Chongqing and Chengdu have enough labor forces to support the economic sector, especially some export-led industries, according to Hofmann, whohas 30-year business experience in China.

The two cities are also good places for innovators as they boast rich talent potentials, he added.

There are good universities and well-educated students in Chongqing and Chengdu who can play the operating and managing roles for investors’ companies, said the business executive.

Hofmann was echoed by Gene Huang, chief economist and vice president of FedEx, who said China’s strategy to develop its western regions is very supportive for doing business in Chongqing and Chengdu, which would remain attractive for U.S. investors “for quite some time.”

President and co-CEO of Tishman Speyer Rob Speyer also agreed that there are enormous government investments in the two cities.

CHONGQING, April 9 (Xinhua) — State Councilor Liu Yandong has called for more efforts in scientific and technological innovation to boost development in China’s Chongqing Municipality.

Liu made the remarks during a recent inspection tour of Chongqing, the only municipality in China’s central and western regions.

She said innovation in science and technology is crucial to combat the financial crisis, optimize industrial structure, adjust the economic growth mode, and to achieve fast development.

During her inspection, Liu visited schools, scientific research institutes, high-tech companies and cultural institutions.

BEIJING, Feb. 21 (Xinhua) — Disposable income was at 8,231 yuan (1,205 U.S. dollars) per capita in 2009 for Chongqing’s urban residents relocated to make way for the Three Gorges project, said the National Bureau of Statistics (NBS) of China Sunday.

The figure was 11.5 percent up from the previous year, according to a statement on the NBS website.

The growth could mainly be attributed to the steady rise in salaries as the local government had taken measures to increase employment opportunities for relocated residents, according to the announcement.

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