Taiwanese flat-panel manufacturers could see their position in China threatened by local rivals by 2016, when Chinese companies are expected to begin mass producing next-generation products, a market researcher said yesterday.
Mass production of panels started at two advanced Chinese plants in the third quarter of 2011 and four others are expected to catch up by 2016, moving China’s position in the panel industry forward, said Delux Chen (陳逸民), a flat-panel industry analyst at the Photonics Industry and Technology Development Association (PIDA, 光電科技工業協進會).
“Chinese panel makers will become more self-sufficient, so Chinese panel orders to overseas suppliers will drop significantly, presenting a big threat to Taiwan-based panel makers,” Chen said during a local industry forum organized by PIDA.
He said that six of the advanced 8.5G plants in China were set up by Chinese flat-panel makers. Three additional advanced plants are foreign owned: two by South Korean companies and one by Taiwan’s AU Optronics Corp (友達光電).
Despite mounting pressure, AU Optronics and another Taiwanese maker, Innolux Corp (群創光電), have shifted their focus to new sizes or technologies rather than expanding their capacity, Chen said.
According to PIDA data, Taiwan’s display panel industry posted a revenue of NT$1.654 trillion (US$54.9 billion) last year, rising 3.3 percent from a year ago, thanks to continued demand for touch panels.
However, the number still lagged behind the global growth rate of 4.7 percent, which was bolstered by demand for wider applications, such as smartphones, tablet computers and ultra-high definition televisions, the association said.
In a recent research report, market information advisory company NPD DisplaySearch said that shipments of ultra-high-definition, or 4K, TVs are expected to hit 12.7 million units this year, as prices for the cutting-edge displays falls, a sharp increase from an estimated 1.9 million units last year.
DisplaySearch projected that Innolux and AU Optronics would be the largest suppliers of this rising demand for 4K TVs.
Analysts have forecast that Innolux’s shipments of 4K panels for this year would reach 12 million units to major clients largely in China, while AU Optronics would ship 5 million units this year to clients such as Sony Corp, Samsung Electronics Co and several Chinese TV brands.
AU Optronics shares closed unchanged at NT$9.37, while Innolux ended down 0.45 percent at NT$11.10 yesterday.