Chi Mei makes tech breakthrough for panels

Chi Mei Optoelectronics Corp (奇美光電), the nation's second-largest maker of flat-computer-screen panels, has successfully developed color filter technology that will give it an edge over the competition, analysts said yesterday.

All flat screens require color filter technology -- usually licensed by South Korean and Japanese firms -- but Chi Mei have developed their own.

"AU Optronics Corp (友達光電) and Hannstar Display Corp (瀚宇彩晶) are both trying to develop their own color-filter technologies, but so far Chi Mei is the only company to have achieved this," said Frank Su (蘇穀祥), an analyst at BNP Paribas in Taipei.

Taiwan is the world's second largest maker of the thin-film transistor liquid crystal display (TFT-LCD) panels used in flat-screen computer displays and televisions, according to US-based research firm DisplaySearch. Color filters are an important component in the manufacture of panels.

"Chi Mei will launch its fifth-generation color-filter technology with its fifth-generation panel fab in the fourth quarter of the year," spokesperson Jack Lin (林榮俊) said. "We are on schedule."

Hannstar's spokesperson Han-nis Chang (張靜潮) confirmed yesterday that his company had set up a joint venture in the Tainan Science-based Industrial Park to produce color filters.

Meanwhile AU Optronics will continue to co-develop color filters with its Japanese partner, head of corporate communications Hsiao Ya-wen (蕭雅文) said yesterday.

Chi Mei's bigger rival, AU Optronics, will need time to catch up, one analyst said.

"At the moment Chi Mei is the only company with their own color filter technology which gives them an advantage over the competi-tion," said Debbie Wu (吳岱玲), an analyst at Yuanta Core Pacific Securities Co (元大京華證券) in Taipei.

"Chi Mei has experience making its own filters, whereas AU Optronics still needs time to gain color filter experience," she said.

The technological leap is expected to take around six months, Wu estimated.

The TFT-LCD industry is currently moving from fourth to fifth generation, or 5G, technology since the first commercial flat screens were produced in the 1990s. New 5G technology allows manufacturers to cut larger 17-inch panels which sell for up to US$100 more than the industry standard, 15-inch.

AU Optronics will start mass-producing panels at its 5G plant next month and Chi Mei aims to start 5G production by yearend.

The company also hopes to surpass AU Optronics' advantage in 5G by using some 5G technology in its 4G factory.

"Chi Mei is already using one-drop fill technology, which is a cell injection process, that is normally used in 5G fabs," Wu said.

When Chi Mei opens its 5G fab, it will have "a short learning curve" in setting up the new production process, she said.

Meanwhile AU still has new ground to cover in terms of both panel making and color filters.

In related news, last week Chi Mei announced that it had produced a panel that doesn't need color filters at all. On March 12, Chi Mei and its Japanese joint-venture IDTech produced a 20-inch organic light-emitting diode (OLED) panel, the largest demonstrated in the world to date, analysts confirmed yesterday.

OLEDs are made from an organic material that, when a current is passed through it, emits light that is red, green, blue or a combination of the three. This removes the need for liquid crystals, color filters and a backlight and thereby reduces the size of the panel compared to LCDs.