Supply chain
Commentary: The rise of 10.5/11G lines and new forces in global flat panel industry
Rebecca Kuo, Taipei; Steve Shen, DIGITIMES

The groundbreaking ceremony held for a 10.5G IGZO TFT-LCD panel plant to be built by Japan-based Sakai Display Products (SDP) in Guangzhou, China heralds a drastic change of the landscape of the global flat panel industry in the coming years.

Including SDP, a total of seven flat panel companies have intentions to invest in 10.5G/11G plants. Among them, China-based BOE Technology and China Star Optoelectronics Technology (CSOT) have also started building their 10.5G lines.

Apparently, a likely result of this "super-generation" race in the flat panel industry is that some of the existing players are to be overwhelmed by rising stars such as SDP (a 53.05%-owned subsidiary of the Foxconn Group), BOE and CSOT.

It took less than three months for SDP/Foxconn from starting negotiating with the city government of Guangzhou to beginning to construct the 10.5G plant, which will require an input of CNY61 billion (US$8.838 billion) in capital.

However, due to the heavy investment amounts and the supply of needed LCD equipment and machinery, four other flat panel makers, LG Display, Samsung Display, Chongqing HKC Optoelectronics Technology and China Electronic Corporation (CEC) which have expressed interests in stepping into the 10.5G lines, have yet to kick off their investment plans.

Since the 10.5/11G lines are the world's highest generation of the flat panel industry currently, the supply capacity of the upstream equipment and component suppliers are essential for potential investors.

For glass substrates, only Corning and Asahi Glass have expertise in producing large-size glass substrates. The two makers reportedly are to build related factories in China to support the 10.5G lines of BOE and CSOT, respectively.

The Japan-based Nikon is currently the only supplier of steppers for the 10.5/11G lines, and therefore winning support from Nikon will also be a key for building the next-generation flat panel plants.

But more importantly, the support of local governments in China plays the ultimate role for BOE, CSOT and SDP/Foxconn to push ahead their 10.5G projects.

It is also worth to note that Taiwan-based flat panel makers AU Optronics (AUO) and Innolux, both are now still major display suppliers to China-based LCD TV makers, appear to have been left out of the race, and that the mighty suppliers Samsung Display and LG Display may no longer play the leading role.

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