Asahi to invest US$109.83 million to produce ultralarge glass substrates

Taiwan is a major player in the thin-film-transistor liquid-crystal display industry, behind only South Korea in terms of world market share.

Major Taiwanese manufacturers in the field include AU Optronics Corp., Quanta Display Inc. and Chi Mei Optoelectronics.

To capitalize on market potential and meet demand from Taiwanese clients, Asahi Glass Fine Techno Taiwan Co. Ltd., a wholly owned subsidiary of Asahi Glass Co. Ltd. of Japan, announced June 19 that it would invest US$109.83 million to construct a glass furnace for production of ultralarge glass substrates for use in flat-screen displays.

This is the first such furnace to be constructed overseas by the Asahi Group. At present, the group has three furnaces operating at its Keihin factory in Yokohama, one under construction at its Kansai factory in Amagasaki--the same type as the one to be built in Taiwan--which will be operational in October.

Asahi uses float-process manufacturing, which is highly suited to mass production of ultralarge glass substrates. Moreover, the glass substrates produced are less prone to warping and shrinkage during heat treatment and are environmentally friendly--that is, free of arsenic and antimony.

The Taiwan project, scheduled for completion in September 2004, will produce 4 million square meters of ultralarge glass substrates annually, creating 200 jobs. Production will be sold to Taiwanese clients.

According to Takeyasu Murayama, Asahi Taiwan's president and general manager, when the plant opens, Taiwan's glass-substrate production is expected to surpass South Korea and Japan to become the world's largest. In 2003, South Korea had a 36-percent global market share, Taiwan 32 percent, Japan 29 percent and the rest of the world 3 percent.

Murayama cited a market research agency report, which indicated that by 2004, Taiwan's global market share will increase to 38 percent--the largest in the world. Meanwhile, South Korea's market share will drop to 33 percent with Japan's at 22 percent. Murayama expects that Taiwan's ratio will increase further in the next two to three years.

In terms of manufacturers, U.S.-based Corning Display Technology is presently the world's largest producer of glass substrates with a global market share of 50 percent, while Asahi ranks second at 30 percent. With completion of its Taiwan furnace, the company's share is expected to increase to 45 percent in 2005.

Murayama pointed out that Taiwan was selected because of market potential. Moreover, Taiwan is the only area outside Japan where Asahi has set up production. In addition, Asahi has strategic alliances with major Taiwanese flat-panel manufacturers such as AU Optronics, Chi Mei and Chunghwa Picture Tubes Ltd.--one reason why the company continues to introduce new manufacturing technology and processes to the island.

The company estimated global sales of flat screens would grow 25 percent annually. Aside from PC monitors, demand for LCD-TVs is expected to grow significantly.

Yunlin was chosen because the county government provided full support and assistance with abundant supplies of water and electricity. Since transportation costs affect competitiveness, Yunlin benefits greatly from its location between the Hsinchu Science-based Industrial Park to the north and Tainan Science-based Industrial Park to the south.

600450 Asahi to invest US$109.83 million to produce ultralarge glass substrates
Date: 7 July 2003

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