Thu, Jul 03, 2003 - Page 10 News List

Flat-screen makers developing Tainan

SCIENCE-PARK LURE Chi Mei Optoelectronics and Hannstar Display are leading the way in building TFT-LCD panel factories in southern Taiwan for logistical advantages

By Bill Heaney  /  STAFF REPORTER

Industry experts yesterday applauded the government's long-term plan to cluster the makers of flat-screen panels and their components in the Tainan Science-based Industrial Park (TSIP).

"It is good logistically to have component suppliers in the same place as the panel manufacturers," said Debbie Wu (吳岱玲), an analyst at Yuanta Core Pacific Securities Co (元大京華證券) in Taipei.

"The glass sheets from which the panels are made are fragile and should not travel long distances, and there is the time-saving factor, not to mention better post-sales services," she said.

Since 1997, 93 companies have moved into the 1,038-hectare Tainan park, with a further 30 to 35 expected to follow this year, park administration spokesman Chen Chun-wei (陳俊偉) said yesterday.

Employing 15,000, the companies are split evenly between flat-panel and computer-chip manufacturers.

Investment plans for the park currently top NT$1.3 trillion, Chen said.

One of the companies is the country's second-largest maker of thin film transistor liquid crystal display (TFT-LCD) panels, Chi Mei Optoelectronics Corp (奇美電子). On Tuesday Chi Mei raised NT$9.5 billion to fund the construction of a more advanced and more efficient fifth-generation (5G) factory in the Tainan park that will build 17-inch panels for televisions.

"Our next fab will definitely be in the TSIP," spokesman Eddie Chen (陳彥松) told the Taipei Times yesterday. "We have an ample supply of land to expand our TFT-LCD production."

It is a good idea to cluster TFT-LCD companies in the TSIP as it saves a lot on logistics costs, Chen said.

"With enough of us here it may also persuade our upstream suppliers to locate in the TSIP," he said.

Rival Hannstar Display Corp (瀚宇彩晶) also plans to build a 5G TFT-LCD panel factory in Tainan to start production in the first quarter of next year.

TFT-LCD component manufacturers are also setting up shop in the park. In March, Hannstar set up a joint venture in the park to produce color filters, an essential flat-panel component.

Backlight and other color-filter makers are also moving to the park.

But Tainan faces competition.

"Creating a TFT-LCD cluster is a good idea, but the problem is there are several choices including Hsinchu and Taichung," said Frank Su (蘇穀祥), an analyst at BNP Paribas in Taipei.

"AU Optronics Corp (友達光電) is locating its 6G or 7G plant in Taichung, for example," he said.

AU, the nation's largest TFT-LCD producer, has a 5G fab in Longtan, near Taoyuan.

Some parts, like the integrated circuits (ICs) that drive the functions of flat panels, may not make it so far south. For driver-IC designers, the most important factor is research and development, Su said.

"Engineers are not too keen on moving to Tainan," he said.

IC-design houses do not need much space for their facilities either, so the extra space available in Tainan is not an issue, he said.

The industry will therefore have two clusters in the future, one in Tainan, the other in the north.

Tainan has also benefited from space constraints at the more established high-technology cluster in Hsinchu, attracting more advanced 12-inch semiconductor fabs that cannot be accommodated next to their 8-inch equivalents.

"The Hsinchu Science-based Industrial Park has no more land for expansion," said George Wu (吳裕良), a chip-industry analyst with Primasia Securities Co in Taipei.

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