FLAT PANEL DISPLAYS (LCD) MARKET
UPDATE
October 2010
McIlvaine Company
TABLE OF CONTENTS
G-Tech to Add Investment in China
Hangzhou Silan Azure to Ramp LED Manufacturing
AUO to Proceed with Plans at Erhlin Park
Cando to Triple Module Capacity
Wintek Expands Monthly Capacity
TPV May Cooperate with Epistar for LED Production
Sintek to Invest in Second Touch Panel Plant
Taiwan-based optical glass processing service provider G-Tech Optoelectronics, an affiliate of the Foxconn Group, will add investment of US$5.2 million in its subsidiary located at its production base in Shenzhen, southern China, with the subsidiary to start volume production of reinforced glass and cover glass used in touch panels in early 2011, according to G-Tech.
It is understood that the new Shenzhen subsidiary is also located in the Foxconn's production base in Shenzhen, and with the company's previous investment of US$4.8 million in the production base, total investment in the base has reached US$10 million.
The board of directors of G-Tech has also decided to set up operational headquarters in Miaoli, Taiwan.
Veeco Instruments Inc. announced that Hangzhou Silan Azure Co. Ltd., one of the largest LED manufacturers in China, has placed a multi-tool order for Veeco's TurboDisc® K465iTM Metal Organic Chemical Vapor Deposition (MOCVD) Systems. The equipment will be placed at Silan Azure's facility in Hangzhou for its high brightness light emitting diode (HB-LED) manufacturing ramp.
Mr. Zhongyong Jiang, President of Silan Azure, commented "We started the cooperation with Veeco by selecting the K465i MOCVD systems because we heard very positive feedback from the industry on the excellent system design and good performance in the field. We believe Veeco's systems will be another good choice for high volume production of LEDs. Given the increased demand for LEDs in such applications as general illumination, TV backlight and outdoor displays, we intend to ramp our production quickly with the cooperation of business partners like Veeco."
Bill Miller, Ph.D., Executive Vice President, Compound Semiconductor and head of Veeco's MOCVD Operations commented, "We are gratified that we have the opportunity to supply Silan Azure, one of the largest LED companies in China. We believe that the China market will drive significant advancement of the LED industry and Veeco, as the market-leading equipment provider in China, is well positioned to benefit from this growth."
Hangzhou Silan Azure Co. Ltd. is one of the largest LED manufacturers in China. They are engaged in the design, development, manufacture and distribution of HB-LEDs, epitaxial wafers and chips. The company is headquartered in Hangzhou, PRC.
Veeco makes equipment to develop and manufacture LEDs, solar panels, hard disk drives, and other devices. We support our customers through product development, manufacturing, sales and service sites in the U.S., Korea, Taiwan, China, Singapore, Japan, Europe and other locations.
AU Optronics (AUO) has said that it will proceed with its planned "Erhlin Project" to build two 11G TFT LCD panel plants and two solar energy plants at the Erhlin Park of the Central Taiwan Science Park (CTSP), after the CTSP announced on September 29 that it will resume construction of Erhlin Park immediately.
The CTSP announcement comes after Taiwan's Highest Administrative Court overruled a Taipei High Administrative Court ruling that ordered the CTSP to suspend further development of Erhlin Park over environmental concerns.
AUO said it welcomed the CTSP's decision and promised it will carry out the investment projects as planned under the government's environmental and social requirements.
AUO is scheduled to implement the Erhlin Projects during the period from 2011-2022 with a total capital of NT$400 billion (US$12.74 billion).
Cando, a subsidiary of AU Optronics (AUO), expects its touch panel module plant in Suzhou, China to have a monthly capacity of 600,000 units at the end of 2010, increasing from the current 200,000 units per month.
The Suzhou plant started small volume production in the third quarter of 2010 and is mainly producing 7- to 15-inch touch panel modules.
As Cando is still transferring its capacity, revenues in the third quarter are expected to remain flat compared to the second, while revenues in the fourth quarter will respond to the growth of its touch panel business. Cando's revenues in the fourth quarter are expected to see significant growth amid increased shipments of touch sensors as the price for touch sensor is over double the price for color filters (CF).
Taiwan-based Wintek has expanded its capacity for medium-size projected capacitive touch panels to 2.1 million units after its factory in Dongguan, southern China, and started production.
In order to meet booming demand, Wintek previously shifted a portion of its capacity for small-size touch panels to producing medium-size applications and it currently ships 700,000-800,000 medium-size touch panels a month. With the capacity expansion, Wintek expects to increase its monthly shipments of medium-size projected capacitive touch panels to 1.4-1.5 million units.
Hong Kong-listed TPV Technology will reportedly work with Taiwan-based LED chip maker Epistar to set up an LED epitaxy wafer production plant in China in order to secure LED supply.
Market sources indicated that TPV will need 150 million large-size panels in 2011. With increasing market share for LED backlighting products, it will be necessary for TPV to secure stable LED chip supplies, and Epistar is expected to expand its existing plant in Xiamen, China in order to install MOCVD machines.
Both Epistar and TPV have declined to comment on the rumor but both would not deny the possibility.
TPV president Jason Hsuan noted in a previous visit to Taiwan that in addition to cooperation with panel makers such as AU Optronics (AUO) and Chimei Innolux (CMI), TPV will continue to strengthen its cooperation with other Taiwan-based suppliers and specifically mentioned Epistar.
As TPV, LED packager Everlight Electronics and Epistar announced in June 2010 to set up a LED packaging plant in Fuzhou, China, TPV now only lacks LED chip production capacity in the company's business arrangement in the LED industry.
Epistar responded that the company will not rule out the possibility for cooperation if the overall demand from TPV can fill up a whole production plant.
In additional, TPV expects the global LCD TV market to increase by 30% on year in 2010 despite the strong pressure for inventory digestion in China's LCD TV market. TPV is expected to ship a total of 70 million LCD monitors and LCD TVs.
The sources added that estimates within TPV expect demand for large-size panels to reach 150 million units.
Volumes of LED chips use in a monitor backlight units (BLU) are about 50 chips, and about 200 chips for a 40-inch LED-backlit TV, the sources said. Based on TPV's shipment goal for LCD monitors of 55 million units and 150 million units of LCD TVs in 2010, the overall demand for LED chips may not be able to fill out a whole production plant. However, with TPV fast expanding its capacity amid the growing China market, the two companies might announce cooperation at the end of 2010.
Epistar's current business layout in China is gradually expanding, including the epitaxy wafer plant in Changzhou with Lite-On Technology, which is scheduled to start production in the second quarter of 2011. The plant will have 10 MOCVD sets in the initial period and may expand to 30 sets in the future in response to market demand.
Moreover, Epistar has also invested US$8 million to acquire a 50% stake in a LED affiliate of United Microelectronics Corporation (UMC) in Jinan.
Color filter (CF) maker Sintek Photronic has acquired land and a factory building in Southern Taiwan Science Park (STSP) from HannStar Display and plans to invest NT$8.8 billion (US$280.04 million) to set up a second touch panel production plant using the 4.5G format.
The new touch panel plant is scheduled to start production in the third quarter of 2011 with a monthly capacity of 90,000 substrates. The plant will cover from upstream touch sensors to downstream module production. About half of the touch panel output will feed the in-house module production, while the rest will be for outside sales.
Sintek currently has a 5.3G plant - the largest production line for projected capacitive touch panels in terms of substrate size. Although the company has recently announced the acquisition of the land and factory building originally meant for housing a HannStar 6G CF plant, Sintek has decided to go for a 4.5G plant instead of 6G due to changes in the touch panel market.
Because there is sufficient land, Sintek also plans to set up its first touch module production line, apart from the 4.5G touch sensor lines. The module capacity will be about half of the touch sensor capacity, which means the company plans to sell 45,000 substrates in the form of touch sensors, and the other 45,000 in module forms.
It is understood that Sintek has been talking with equipment suppliers, and already placed orders for some of the equipment. With the acquisition of the land for the new plant amid growing availability of 4.5G touch panel capacities on the market, Sintek hopes to start constructing the plant as soon as possible and plans to start volume production in the third quarter of 2011.
The investment for the new plant will cost NT$8.8 billion. As for whether Sintek has new plans to increase capital, Sintek responded that Sintek's has sufficient cash of about US$200-300 million, which is enough to fulfill the needs of the new plant. Raising funds is not Sintek's priority, and if it needs to raise funds, Sintek would tend to take out syndicated loans from banks or conducting rights issues in line with market situations. But no plans have been finalized.
Cree, Inc. continues to lead the LED Lighting Revolution with the announcement of a new 150mm LED wafer production facility in Research Triangle Park (RTP) that is targeted to create hundreds of green jobs in North Carolina. The new LED wafer production line will be located in Cree's existing RTP production facility, and will allow Cree to produce 150mm LED wafers that are more than double the size of current ones, increasing the number of LEDs from a single wafer, helping to make LED lighting more cost-effective. The new production line is scheduled to be installed over the next several quarters with a target of having the first products qualified on this line by June 2011.
Energy-efficient LED lighting is being installed in more places, in more countries every day. Companies, cities, universities and the federal government are saving energy and money by joining the LED Lighting Revolution. To keep pace with the growing market for energy-efficient LED lighting, Cree has added more than 600 jobs since early 2009, surpassing the company's 2012 hiring goals set last fall. Cree anticipates hiring nearly 250 more employees by 2013 to staff the new wafer production line expansion.
"150mm LED wafers are an important step in enabling the next phase of LED lighting," said Cree CEO and Chairman, Chuck Swoboda. "These new larger wafers are the result of Cree's relentless focus on innovation, demonstrating our commitment to leading the LED Lighting Revolution."
McIlvaine Company
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