NEG to set up new glass furnace in Taiwan

Date: 17 March 2005

Nippon Electric Glass Co. Ltd. of Japan plans to invest over NT$10 billion (US$323.62 million at US$1: NT$33.8) to set up a glass furnace in central Taiwan, according to industry sources.

With the NEG's move, all of the top-four glass-substrate makers in the world will run furnaces in Taiwan, which is expected to drive down the prices of glass substrates, a key material for TFT-LCD panels.

NEG currently runs a rear-section glass-substrate cutting line in central Taiwan's Taichung, and its second such line on the island will be ready for mass production in the near future.

Currently, industry sources, Corning of the U.S. and NEG are the only two companies that own higher defect-free ratios and stable quality for sixth-generation glass substrates.

NEG is reportedly scheduled to add a glass-production line in Taiwan and increase its monthly capacity on the island to 600,000 square meters from 150,000 to 160,000 square meters. In addition, NEG has decided to set up a furnace in South Korea in cooperation with LG.Philips LCD Co., Ltd. (LPL) there. NEG's sixth-generation glass substrates have begun tapping orders from LPL and AU Optronics Corp. (AUO), No. 1 panel maker in Taiwan. The Japanese glassmaker is expected to take away increasing market share from Corning, which currently almost monopolizes the new-generation business.

Corning has also been active expanding its production in Taiwan, a global production base of TFT-LCD panels. The American company has announced four investment projects, at total costs of US$1.86 billion, in Taiwan, including a US$180 million project to expand its plant in southern Taiwan's Tainan; a US$600 million project in Tainan and another facility in Japan; a US$750 million project in Central Taiwan Science Park (CTSP); and a US$326 million project in the same CTSP plant.

NH Techno Co. (NHT) of Japan, another major glass producer, currently runs two glass furnaces in Tainan and is scheduled to install six additional furnaces on the island. NHT has applied to the Taiwan government for a 3-acre land to set up the new furnaces.

Asahi Glass of Japan has set up a glass furnace in Central Taiwan Science Park and is expected to continue expanding capacity at the facility.

All the world's leading glassmakers are eyeing the lucrative business opportunities from the new-generation panel production by Taiwan's panel makers.