Rebound! After a Tough 2007, Strong Growth for the TFT-LCD Market in 2008

Rebound! After a Tough 2007, Strong Growth for the TFT-LCD Market in 2008

Special contributions by Charles Annis, VP of manufacturing research, DisplaySearch
By Edwin Hall, senior business development manager, Industry Research & Statistics, SEMI

Liquid Crystal Displays (LCDs) are everywhere. You see them on everything from cell phones, to navigational systems, to digital cameras/camcorders, to notebooks, to televisions, and even on refrigerators. With the availability of High Definition video content, large TV screens are currently drawing the most attention with its large and bright displays. This results in increased demand for flat panel displays — particularly LCD displays. According to DisplaySearch, the TFT-LCD market is projected to exceed US$ 110 billion this year.


TFT-LCD equipment and materials markets are large and diverse, which form the backbone of the FPD industry. TFT LCD equipment spending has increased significantly from 1996 from US$ 1B to an estimated US$ 12.5B for 2008. Similarly, TFT-LCD materials have also grown significantly from US $3B to $55B in the same timeframe.

For TFT-LCD equipment, this segment experienced a large drop in 2007, but is projected to rebound to 2006 levels by the end of 2008. According to DisplaySearch, it is forecasted for a 30%+ growth for 2008 despite current recessionary concerns. However, this growth will slow to US $11.6B in 2009 due to cost reduction of materials/components. In addition, TFT-LCD materials have enjoyed healthy growth since 2005. The material segment will grow about 7% from US$ 51.5B to US$ 55.0B by the end of 2008.

Source: DisplaySearch’s 10th Annual U.S. FPD Conference, March 11, 2008

    Notes:

      1. TFT-LCD Only (no OLEDs). Preliminary Q1 ’08 forecast for US FPD 08.

      2. Materials includes glass, backlight (BLU), color filter, polarizer, inverter, target, liquid crystal, driver IC, PCB, etc..

This upswing is due to the flurry of TFT-LCD fab expansion for all regions as panel makers rush to catch-up with what they expect to be tight supply in H2 ’08 and ‘09. For example, in Taiwan, both AU Optronics (AUO) and Chi Mei Optoelectronics (CMO) are looking at expanding their G8 plans earlier than expected. AUO (L8-A) is estimated to start producing 2200 x 2500 panels by Q2 ’09. CMO (Fab 8) is planning to go into production with the same panel size around the Q3 ’09 timeframe. AUO is also increasing capacity in its Gen 7 and G6 lines, while CMO is increasing its Gen 6 line.

Producer

City

Country

Fab Name

Date of
roduction

GEN

Substrate Size
(mm)

substrates/month
(maximum)

AUO

Taichung

Taiwan

L8A

Q2 ‘09

8

2200 x 2500

45,000

AUO

Taichung

Taiwan

L7B

Q2 ‘09

7

1950 x 2250

65,000

CMO

Tainan

Taiwan

Fab 8

Q3 ‘09

8

2200 x 2500

60,000

Source: Flat Panel Fabs, April 2008

In Korea, both Samsung and LG displays are making great strides in expanding their Gen 8 capacities. Samsung is planning to ramp up their L8-1 line to a capacity of 95,000 substrates/month by the end of this year which is expected to increase to 120,000 substrates/month beginning in Q2 ’09. In addition, Samsung is planning to build a 2nd Gen 8 line (L8-2) before they start plans on a larger glass size (Gen 10). Together, this will bring Samsung’s Gen 8 total capacity to 180,000 substrates/month by the end of 2009.

Samsung LCD Facilities
Tang-Jeong Campus

Similarly, LG displays Gen 8 line is expected to have a capacity of 83,000 substrates/month and will be in mass production by the beginning of 2009.

Producer

City

Country

Fab Name

Date of Production

GEN

Substrate Size (mm)

substrates/month

(maximum)

LG Display

Paju

South Korea

P8

Q1 ‘09

8

2200 x 2500

83,000

Samsung

Tanjeong

South Korea

Line 8-2

Q2 ‘09

8

2200 x 2500

120,000

Samsung

Tanjeong

South Korea

Line 8-1

Increasing capacity

8

2200 x 2500

120,000

Source: Flat Panel Fabs, April 2008

In Japan, IPS Alpha Technology (Matsushita being the major share holder) is planning to spend US $3 billion to build a Gen 8 line that will be capable of producing a maximum of 90,000 substrates/month. Construction is scheduled to start in August and fab is planned to start production in January 2010.

Producer

City

Country

Fab Name

Date of Production

GEN

Substrate Size (mm)

substrates/month

(maximum)

IPS Alpha

Himeji

Japan

Himeji 1

Q1 ‘10

8

2200 x 2500

90,000

Sharp

Sakai

Japan

G10

Q2 ‘09

10

2880 x 3130

72,000

Source: DisplaySearch and Flat Panel Fabs, April 2008

Sharp is the first company to dive into the Gen 10 substrates. The company is planning a 1.27 million square meter facility in Sakai City, Japan. The unique angle about this is that key component makers and suppliers are being invited to build facilities next to Sharp’s fab.

The move to larger panel production is important to LCD panel makers seeking to increase production capacity, improve productivity, and enable the manufacture of larger LCD panels. It is projected that between 2007 and 2010, more money will be spent on Gen 8 equipment than any other glass size. As fabs move to the next generation of substrates, we will begin to see a shift in spending. However, this shift in Gen 10 equipment spending will not begin until after 2010.

Source: DisplaySearch, March 2008

2008 is projected to be an excellent year for the TFT-LCD market. 2009 will most likely be a good year for both equipment manufacturers and panel makers. Looking forward, it will be interesting to see how the industry handles the supply/demand balance. This will determine if we see another growth year or a slow year.

Portions of the data in this article were derived from a recently updated database called the Flat Panel Fabs, produced by DisplaySearch and sold only through SEMI®. Information was also included from materials distributed at this year’s DisplaySearch 2008 U.S. FPD Conference. This database is ideal for keeping track of industry development and company growth in the LCD market. The list has grown to over 500 entries in the areas of a-Si and P-Si TFTs, and other flat panel technologies such as Plasma, AMOLED, and PMOLED. The database details fabs worldwide including those in Japan, Korea, Taiwan, China, Europe, and North America. If you would like a free sample of the Flat Panel Fabs report, please feel free to contact Ed Hall (ehall@semi.org).