South Korea's Samsung Electron-ics Co and its flat-panel rivals are expected to increase their capital spending this year by 43 percent to meet strong demand for personal computers and flat-screen televisions, a research agency said yesterday.
Capital spending in the thin-film transistor liquid-crystal display (TFT-LCD) industry this year is expected to soar to a record US$9.42 billion, up 43 percent from last year, global market researcher DisplaySearch said in a report released yesterday.
Spending rose 26 percent to US$6.59 billion the previous year.
"In response to strong demand for more and larger-screen notebook PCs, LCD monitors and LCD TVs, panel suppliers are rapidly accelerating fab spending plans," the report said.
DisplaySearch expects Samsung to lead investment this year, spending 17 percent of the total in the sector, to expand its fifth-generation (5G) production line and its first seventh-generation (7G) fab. Each new generation of fab produces larger sheets of glass from which more panels can be cut more efficiently.
Taiwan's AU Optronics Corp (
AU, the nation's biggest flat-panel maker, plans to spend NT$40 billion to NT$50 billion and on its second 5G line and NT$80 billion to NT$90 billion on a 6G fab in the next few years, senior public relations manager Hsiao Ya-wen (
Chi Mei Optoelectronics Corp (
Taiwanese flat-panel suppliers are expected to spend as much this year as all other countries put together. South Korea's spending is forecast to account for 28 percent of the US$9.42 billion total.
Taiwan needs the extra money to catch up with its rivals.
"Local flat-panel makers are trying to take on their Korean rivals by rapidly increasing their equipment spending on 5G or 6G fabs," said Eric Twu (涂紀華), an analyst at SinoPac Securities Corp (建華證券).
Taiwanese companies will be able to go head-to-head with their bigger South Korean competitors this year by grabbing about 40 percent of the global market after their 5G plants start production, Twu predicted.
Tim Chen (陳建光), an analyst at brokerage CLSA Ltd in Taipei, expects Taiwanese flat-panel players to reach around 35 percent to 40 percent market share this year, tying with their South Korean counterparts.
But local companies still lag behind Samsung and LG Philips in terms of production value, a more significant gauge of competitiveness, Chen warned.
"That's because Korean players enjoy better average selling prices than their rivals as they are capable of offering a full range of panels and producing the high-margin large panels used in LCD TVs," he said.
Among local primary players, Chen said only Chi Mei could mass produce panels more than 27 inches across.
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