IEK: China Needs at Least Four 7.5G Plants to Meet LCD TV Demand in 2010

China will need at least four 7.5-generation (7.5G) TFT LCD plants to accommodate the strong demand for LCD TVs in the market by 2010, according to Taiwan's Industrial Economics and Knowledge Center (IEK) under the government-sponsored Industrial Technology Research Institute (ITRI).

LCD TV demand in China will climb to 25.1 million units by 2010, accounting for around 20% of global LCD TV demand, IEK indicated.

Since integration of the panel industry in China is imminent, it is inevitable for the surviving panel makers to enter next-generation production, IEK said.

China's panel makers will consolidate into one company in the fourth quarter of 2007, with the government taking a stake in the venture, according to industry sources in January. After the consolidation, China's government will be the largest shareholder, with a 36% stake while Shanghai SVA-NEC Liquid Crystal Display (SVA-NEC), BOE Optoelectronics Technology (BOE OT), and Info Vision Optronics (IVO) will hold stakes of 30%, 27% and 7%, respectively, the sources noted.

While makers in Japan and South Korea are aggressively seeking partners in China, Taiwan-based panel makers will need to become more active in strengthening their ties with China, IEK added.

Although China still lacks a complete upstream supply chain and qualified manpower, Taiwan-based panel makers will face rising competition from China if TV prices keep falling and glass substrate makers are willing to set up furnaces there, IEK noted.

Besides establishing LCD module (LCM) plants with China-based makers, Taiwan-based companies will also have to strengthen their patent rights deployment in China and focus on keeping professionals with key technical skills, IEK suggested. Currently, all major Taiwan-based panel makers have LCM facilities in China.

SVA-NEC will be the first China-based panel maker to invest in a 7G/7.5G TFT LCD plant, with the plant to come online in 2009 at the soonest, according to research firm Displaybank last October.

Currently, SVA-NEC, BOE OT and IVO have a monthly capacity of 90,000, 80,000 and 30,000 glass substrates, respectively, from their 5G plants.

600450 IEK: China Needs at Least Four 7.5G Plants to Meet LCD TV Demand in 2010
Date: 4 April 2007

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