Future murky for high-tech glass

The future is murky for a new flat-panel glass factory being built by Picvue Optoelectronics Interna-tional Co (碧悠光電) in Chutung, Hsinchu County, industry watchers said yesterday.

Picvue Optoelectronics, a subsidiary of Picvue Electronics Ltd (碧悠電子), broke ground Tuesday on a new facility to make glass substrates, or mother glass, which form the base of thin-film transistor liquid crystal displays (TFT-LCDs).

But a lack of customers and a copyright infringement dispute may halt the new development before production lines get up to speed.

"There is a question mark over whether Taiwanese TFT-LCD panel makers would want to use Taiwanese-produced mother glass," said Frank Su (蘇穀祥), an analyst at BNP Paribas in Taipei.

"The mother glass is only 5 percent to 10 percent of the cost of a panel. It is unclear whether Taiwanese producers will risk quality to make such small savings."

The nation's flat-panel makers, who together supply between 35 percent and 40 percent of the world's TFT-LCD needs, according to research firm DisplaySearch, currently buy most of their mother glass from Japanese companies such as Asahi Glass Co and Nippon Electric Glass Co or Corning Inc in the US.

Very few Taiwanese manufacturers want to make mother glass since they would have to pay hefty royalties to Asahi, NEG and Corning, who hold the rights to the technology needed to produce it, Su said.

Another analyst, Debbie Wu (吳岱玲), of Yuanta Core Pacific Securities Co (元大京華證券) in Taipei, agreed.

"It will be really hard for Picvue to get customers and compete against the Japanese and Corning," she said.

It is also unclear where Picvue obtained the technology it will use in the new factory.

Corning filed suit against Picvue and Eglasstrek GmbH of Germany in June last year, alleging they had stolen trade secrets and infringed Corning's copyright on fusion-draw technology for producing mother glass, according to the company's Web site.

A Picvue official who asked not to be named refuted the allegation, saying his company has been making glass substrates for CRT (cathode-ray tube) displays for 30 years and TFT-LCD panels for 12 years.

"Corning's patent has expired," the official said. "The reason we can manufacture glass substrates at the new factory is that, in addition to our own experience, we have technology from Germany, the US and Japan and technical support from the Industrial Technology Research Institute [ITRI] in Taiwan," he said.

The president of Display-Search's Taiwan branch office also cast doubt on the provenance of Picvue's manufacturing technology.

"As far as I am aware, there are only two workable processes for the manufacture of advanced TFT-LCD glass substrates," Wang Chien-erh (王建二) said. "Corning has the rights to one and Asahi the other, but Picvue claims it has a license from ITRI."

ITRI's spokeswoman declined to comment on the case yesterday.

The case against Picvue, filed in Rochester, New York has yet to be decided. If the court finds in Corning's favor, the US company may want to make an example of its potential rival.

"I guess Corning will force Picvue to pay royalties, but they might be more aggressive as they plan to set up their own facility in Taiwan," Wu said.