MORE STANDARDS WILL HELP REDUCE FLAT PANEL COST, INCREASE EFFICIENCY
Taiwan, Korea Dominate Large Area LCDs; Japan Shifts to OLED
Taipei, Taiwan, June 16, 2006 -- More standardization is necessary to increase manufacturing efficiency and lower the price of flat panel displays, according to a keynote speaker on the third day of FPD Taiwan 2006.
Currently there are 39 active SEMI FPD standards, ranging from surface roughness measurement methods for glass substrates to common terminologies for LCD backlight units. “I don’t think this is enough. We need more standards to achieve lower cost and efficient processing,” said Hiroaki Kitahara, a project manager in the Engineering and Technology Services Division of IBM Japan.
Kitahara highlighted the difficult task of standardizing FPD substrate sizes. Competition among panel makers results in a variety of panel sizes for each technology generation. For example, Generation 3 LCD fabs spawned nine different substrate sizes from companies such as Sharp, Samsung and Hitachi. Starting from Generation 6, the situation has improved with only two different panel sizes introduced per generation.
To promote healthy growth in the FPD industry, collaboration is required between panel makers and the equipment and materials suppliers, according to Kitahara. Not only that, he believes collaboration is necessary between the four major FPD producing regions -- China, Japan, Korea and Taiwan -- in order to create greater efficiencies.
Earlier at the expo, analysts presented data on the size of the FPD equipment and materials markets. The market for equipment is expected to reach $11.6 billion in 2006 and remain relatively flat through to 2009, according to Displaysearch. Lithography tools are the single largest equipment segment, accounting for one quarter of all array equipment spending. However, materials account for more than 70 percent of the cost of a large LCD, with the backlight unit being the single most expensive component at one quarter to one third of the cost.
Taiwan continues to outspend Korea in terms of capital investment, accounting for 57 percent of all FPD manufacturing equipment purchases in 2005 and an estimated 48 percent this year, according to Displaysearch. Taiwan’s share will fall in 2007, to about 23 percent of all equipment spending. In comparison, Korean FPD makers will account for about one quarter of the equipment market in 2005 and 2006, increasing to a forecasted 48 percent in 2007. Japan’s share of the equipment spending was 15 percent in 2005, rising to a forecasted 19 percent this year.
In 2006, Taiwan’s total capital expenditure for FPDs is expected to reach $7.6 billion, down about 6 percent from the previous year, according to WitsView Technology, a market research firm. Korea’s capex is expected to reach $6.9 billion this year, down about 4 percent from 2005.
In the face of the Taiwan and Korean dominance in TFT-LCDs, Japanese panel makers are switching emphasis to newer technologies, such as OLED and FED. However, the competition is heating up in OLED, with Samsung SDI investing in a Gen 4 line with capacity for 20 million cell phone displays per year. Visionox of Beijing is investing in China’s first OLED line, which is expected to be in commercial production by 2009.
The focus on OLED is not surprising given that this market is growing five times faster than active matrix LCD. From 2005 to 2010, the OLED display market will grow at a forecasted compound annual growth rate of 56 percent in revenue terms compared with 11 percent CAGR for AMLCD, according to Displaysearch. However, TFT LCD remains the dominant technology, accounting for 80 percent of the total FPD market through to 2010.
Generation 5 lines still dominate the industry at present, followed by Gen 6 which accounts for almost 24 percent of all capacity in Q206, according to WitsView. By the end of this year, Gen 6 and above will account for half of the capacity.
Displaysearch analyst Charles Annis believes one or two Generation 9 LCD fabs may be possible in 2009 if new technologies enable lower cost manufacturing, and if panel makers can stimulate consumer demand for displays exceeding 55-inch in size.
FPD Taiwan 2006 concludes June 16 at the Taipei World Trade Center, Taipei, Taiwan.
SEMI is a global industry association serving companies that provide equipment, materials and services used to manufacture semiconductors, displays, nano-scaled structures, micro-electromechanical systems (MEMS) and related technologies. SEMI maintains offices in Austin, Beijing, Brussels, Hsinchu, Moscow, San Jose (California), Seoul, Shanghai, Singapore, Tokyo and Washington, D.C. For more information, visit www.semi.org.
Scott Smith/SEMI US