Asahi helps boost Taiwan LCD sector

Japan“s glass producer Asahi Glass has completed its first thin-film transistor liquid crystal display (TFT-LCD) glass substrate factory in Taiwan to supply the island“s growing flat-panel industry….

Japan“s glass producer Asahi Glass has completed its first thin-film transistor liquid crystal display (TFT-LCD) glass substrate factory in Taiwan to supply the island“s growing flat-panel industry. The US$ 285 million factory will start shipping glass this quarter and will be at full annual capacity of 2.3 million sq.m. by 2005. Asahi Glass is the world“s second-largest LCD glass supplier with about 30% market share – behind Corning of the US, which has 50-60%. Corning already has set up facilities in the southern Taiwan city of Tainan and will have higher capacity than Asahi. The move to produce glass in Taiwan is expected to further help the growing flat-panel display industry. Glass substrate is a key component in TFT-LCD manufacturing, with demand expected to grow as flat-panel makers start to make them as a lighter and thinner alternative to cathode ray tubes (CRT) used in computer monitors and television sets. Taiwan“s TFT-LCD market share has grown significantly since its inception in 1999. Market share grew from 17.6% in the first quarter of this year to 22.7% in the second quarter, according to industry research company Display Search. Display Search estimates that Taiwan“s market share will grow to 27% by the end of this year at the expense of Japan, which will see a fall from 43.1% in the first quarter to 30% by the end of the year. South Korea is expected to take the lead in the industry, rising from 39.1% to 43% during the year. Taiwan“s Ministry of Economic Affairs estimates overall LCD production this year will reach US$ 4.9 billion, up 70% from last year. The rise in the LCD and flat-panel industry has come at the expense of Japan after a campaign by the ministry to lure Japanese makers to the island. Under Taiwan“s strategy to boost emerging industries, foreign manufacturers are offered tax incentives and cheap loans to relocate to Taiwan. The Asahi Glass project in central Taiwan will benefit from those incentives, according to Edie Wang, deputy director of the ministry“s office of the Committee for Information Industry Development. The addition of the Asahi line would significantly reduce the need to import glass substrate and thus reduce its cost, which would flow through to the end-user and make the Taiwan industry more competitive, said Wang, who helped broker the deal with Asahi Glass. While demand for TFT-LCDs is rising, supply exceeds demand due to significant increases in production facilities over the past two years. According to Display Search, the TFT-LCD surplus is about 13%, a slight fall from 16% in the first quarter of the year. In addition to Corning and Asahi Glass, Sony, Toshiba and CMC Magnetics have announced plans to invest in LCD component facilities.