A proposal by three of Taiwan's leading technology firms to set up a company making the chips that drive flat-screen computer displays was called a "win-win-win" deal by analysts yesterday.
Venture capital companies tied to BenQ Corp (
One market watcher said the prospects for the plan look good.
"This is a win-win-win situation for all three companies," said Benny Lo (
LCD-driver chips are made with transistors measuring 0.35 microns across, while the chip industry standard is now less than half that size. By securing orders from the new chip company, TSMC won't have to retire its older equipment.
BenQ currently buys LCD-driver chips from overseas companies like NEC Corp and Texas Instruments Inc, and from local supplier Novatek Microelectronics Corp (
BenQ also buys controller chips -- another chip needed to run the display of a flat screen -- from Media Reality's US rival, Genesis Microchip Inc.
Media Reality is currently being sued by Genesis in the US, claiming the Taiwanese company is infringing a Genesis patent and requesting Media Reality's products be banned from the US market.
Media Reality is expected to gain orders from Taiwan's largest maker of flat-screen computer panels, AU Optronics Corp (
Last month BenQ shipped 370,000 flat-screen computers, up 45 percent from March. BenQ is also a major shareholder in AU Optronics.
The tie-up should lead to cost savings.
"The alliance will help AU Optronics to increase its component control ability and reduce costs also," said Nathan Lin (
But the new company is bad news for Novatek.
"AU Optronics accounts for around 40 to 45 percent of Novatek's total sales," Lin said. "As a result, we consider the alliance as negative news for them."
The three potential partners remained tight-lipped about the alliance yesterday. BenQ spokesman Alex Liou (劉維宇) refused to confirm the tie-up and TSMC's spokesman, Tseng Jin-hao (
"One of our investment arms is talking with BenQ's investment arm," said Tseng. "They might have some project under discussion at the moment."
Media Reality's spokesman did not return calls yesterday.