Nippon Electric Glass to expand glass capacity in Taiwan

With three production lines, NEG's monthly output capacity of glass substrates in Taiwan will increase to 550,000 to 600,000 square meters, and the Japanese company plans to offer more preferential panel prices to local thin film transistor-liquid crystal display (TFT-LCD) panel makers.

Most of local panel makers' new-generation panel capacities (including 5.5th- and sixth-generation) will become operational this year, including AU Optronics Corp. (AUO, the island's No. 1 maker), Chi Mei Optoelectronics Corp. (CMO, No.2), Chunghwa Picture Tubes, Ltd. (CPT, No.3) and Quanta Display Inc. (No. 4). All of the added capacities will be focused on over-32-inch (included) LCD TV panels, which, in turn, will stimulate demand for larged-size glass substrates. The expanding local demand for substrates has attracted many major international glass makers to set up production plants in Taiwan, including Corning Inc. of the U.S. as well as NEG, Asahi Glass Co. (AGC) and NH Techno Co. of Japan.

NEG is reportedly to boost its global monthly capacity by 40 percent to 1.4 million square meters by August this year, and the additional output will be supplied to TFT-LCD panel makers in Taiwan and South Korea. NEG also plans to invest 20 billion yen in furnace expansion.

NEG now operates two substrate production lines in Taichung, central Taiwan, and its planned new production line is expected to sharply boost the company's local monthly capacity to about 600,000 square meters from 150,00 to 160,000 square meters. Industry sources said that NEG has successfully joined the supply chains of the sixth-generation business of LG.Philips LCD Co., Ltd. (LPL) of South Korea and major panel makers in Taiwan, making the Japanese company gradually take away market shares held by Corning.

Corning is currently the world's No. 1 supplier of mother glass with a global market share of 50 percent, and AGC No. 2. NEG, however, launched its sixth-generation substrate products earlier than other Japanese counterparts, and is expected to be a major supplier of new-generation panels.

In addition, the sources added, most Taiwan panel makers are actively trying to cut costs as they began suffering losses in the fourth quarter last year. Accordingly, NEG's preferential prices are expected to be greatly welcomed.

Corning is also actively expanding its glass capacity in Taiwan, the sources pointed out. The American company has announced four investment projects with total investment of US$1.86 billion.

Meanwhile, NH Techno recently asked Taiwan government to provide a three-acre land and plans to set up six new furnaces on the island, and ASG set up new furnaces in Central Taiwan Science Park (CTSP) recently.