The Industrial Technology Department (ITD) of the Taiwanese Ministry of Economic Affairs (MOEA) recently agreed to subsidize the future R&D work of a group of domestic component manufacturers for flat…
The Industrial Technology Department (ITD) of the Taiwanese Ministry of Economic Affairs (MOEA) recently agreed to subsidize the future R&D work of a group of domestic component manufacturers for flat-panel displays (FPDs), in an attempt to reduce dependence on foreign sources for technology and to increase the local-content ratio of Taiwan“s FPD industry. The MOEA says that it has given out TWD 8 billion (USD 240 million) in subsidies for FPD R&D work in Taiwan since 1987, with encouraging results. Strong government support stimulated private manufacturers of TFT-LCD products to invest more than TWD 400 billion (USD 11.94 billion) of their own resources from 1998 through 2003; as a result, Taiwan is expected to move ahead of South Korea to become the world“s top supplier of these products in the 4Q of 2004. This level of investment is expected to continue, with Taiwan“s seven panel makers planning a total investment of another TWD 400 billion from now through 2006 in fifth-and sixth-generation FPD facilities. The ITD warns, however, that rivals in South Korea and Japan will provide a stern test to local producers, who will need to overcome their lack of intellectual property rights, low local content, and skill shortages. In the years to come, the ITD will allocate at least TWD 6 billion (USD 179 million) in R&D subsidies for the seven local panel makers, each of which is expected to invest an average of about TWD 10 billion (USD 298 million) per annum in the development of technology. The aim is to accelerate FPD development on the island. Meanwhile, the ITD reports that 15 local makers of FPD materials have applied to the government for assistance with their product-development projects, and that the MOEA has been quick to agree. Among the 15 are Allied Material Technology Corp., Cando Corp., Eternal Chemical Co., Teco Optronics Corp., RiTdisplay Corp., Epistar Corp., Chi Lin Technology Co., and Coretronic Corp. The R&D work will concentrate on the development of backlight modules, color filters, and white organic light-emitting diodes (OLEDs). The government hopes that the projects will establish a model for cooperation with local academic institutions and private manufacturers. The MOEA also recently announced a plan to attract leading international FPD-parts makers to invest in Taiwan. The objective is to intensify the industrial-cluster effect on the island and improve the local-content ratio of the industry. As a result of the high level of investment, the MOEA predicts that the production value of Taiwan“s FPD industry will rise 59% in 2004, to TWD 662 billion (USD 19.76 billion). The government will prioritise development of FPD manufacturing over the next few years, and related industrial clusters are being formed. Several international makers of key components have already set up plants in Taiwan, including Corning of the United States, Merck of Germany, Asahi, Nippon Electric Glass, Hoya, and Nitto Denko of Japan, and NH Techno of Taiwan. In fact, the MOEA notes, intensive clusters have already developed in the Central Taiwan Science Park and the Southern Taiwan Science Park, but the manufacturing technology for some key parts and materials is still controlled by a small number of international companies. Taiwan“s ability to overcome this problem, the ministry notes, will be the critical factor in whether it can continue developing its FPD industry to become the leading supplier in the world.