Wed, Dec 29, 1999 page18

• Taiwan ready to be center of notebook production

  OUTLOOK A number of important strategic partnerships between Japanese and Taiwanese firms have paved the way for Taiwan to take a large slice of the industry

  • By Stuart Young / STAFF REPORTER
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  A new original equipment manufacturing (OEM) industry for Taiwan is in the making with Japan's liquid crystal display (LCD) makers shifting a large slice of production and technology overseas this year, a recent report has said

  Japanese makers are also investing tens of billions of yen at home in new LCD factories as part of a new trend toward strategic partnerships in LCD production.

  The report, released recently by the Institute for Information Industry(資訊工業促進會, III), said Japanese producers are specializing in advanced products rather than investing in large production facilities to compete on a price basis.

  The shift away from all-purpose TFT (thin film transistor)-LCD manufacturing is anticipated to make Taiwan a major foreign supplier for Japanese notebook manufacturers, with local firms Acer Display Technology Inc, Chunghwa Picture Tube Co, Hannstar Display Corp, Unipac Optoelectronics Corp, Quanta Display Inc and Chi Mei Optoelectronics Corp.

  Among the partnerships with Taiwanese is Matsushita's agreement with Chunghwa Picture Tube to provide technology and outsource production. Matsushita is also providing manufacturing technology and technical support for Unipac Optoelectronics as well as outsourcing production of standardized LCD products to the local firm.

  Matsushita launched an all-out effort this year to produce large LCD panels for televisions and monitors, aiming for 50 percent of LCD earnings from the monitor market in 1999 and hoping to top this figure next year. Matsushita estimated notebook LCDs would fall to 20 percent of its TFT-LCD revenues in 1999.

  Among other partnerships, Toshiba is providing technology for Taiwan's Hannstar, while Fujitsu is outsourcing to Chi Mei and considering technology transfers to the local firm. IBM is providing technology for Acer Display, while IBM subsidiary DTI supplies equipment and outsources to China firm Jilin Electronics.

  Mitsubishi bought out Asahi's 15 percent stake in joint venture Advanced Display (ADI) and expects TFT-LCD revenues to grow by 140 percent to ?60 billion. ADI will turn over most of its 14.1-inch model production -- which accounted for 15 percent of total production in the first half of 1999 -- to Taiwan's Chunghwa Picture Tube.

  Toshiba is providing technology for Taiwanese manufacturer Hannstar as well as to DTI, assisting the IBM firm's manufacturing of non-silicate LCDs in China. Toshiba is also investing heavily in developing low-temperature polysilicate products, and will first begin producing 10-inch screens for notebook computers, followed by LCDs for DVD players, portable information appliances and other miniaturized products. The company aims to increase low-temperature LCD revenues to 50 percent of its total LCD earnings by 2001, the III report said.

  High value-added Japanese firm Sharp created a joint venture with Taiwanese producer Quanta this year. Sharp possesses highly advanced and specialized LCD production technologies and is moving LCD production offshore whilst concentrating equipment investments in Japan on developing LCD monitors, portable information appliances, auto equipment and wide-angle, anti-glare color panels for LCD TV sets in order to reduce its dependence on notebook PC applications.

  Sharp is the world's only producer of plastic LCDs, which are 1.6 inches thick and ten times stronger than panels made of glass. The company began producing LCDs in the second half of 1998, and achieved year-end plastic LCD revenues of more than ?1 billion. Sharp expects the shrinking size of mobile phones to fuel demand for plastic instead of silicate LCDs and is boosting production of plastic LCD panels to 5 million per month by the end of next year and expects total 1999 plastic LCD revenues to reach ?10 million.

  The partnership deals come amidst this year's recovery of LCD prices after heavy losses for LCD manufacturers in 1987 when prices slumped. However, despite industry growth, Japanese LCD manufacturers remained more conservative than their Korean competitors, the December report said.

  According to figures released recently by the Photonic Industry & Technology Association (PITDA), Taiwan is the world's third largest LCD producer, with Japan in first place and Korea second. The PITDA survey estimated Taiwan produced NT$11.5 billion (US$350 million) worth of TFT-LCDs in 1999 and predicted the figure would soar to NT$87 billion (US$2.6 billion) in 2000.
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