Flat panel display production up 37% in 2006

This article was published by the Taiwan Headlines on April 6, 2006. It reports that the production value of Taiwan's flat panel display (FPD) industry is expected to reach NT$1.3 trillion (US$40 billion) in 2006, up 37 percent from 2005. If this projection comes true, then Taiwan's FPD production will outstrip that of semiconductors for the first time.

According to the Industrial Economics and Knowledge Center under the Industrial Technology Research Institute, Taiwan is also likely to become the world's largest producer of TN/super twisted nematic (STN) panels in 2006, replacing South Korea.

FPD manufacturing is one of the "Two Trillion NT Dollar Industries" pinpointed by the government for priority development. The other is the integrated circuit industry. Together, these two industries account for about 90 percent of Taiwan's major investment projects.

Over the past decade, FPD production has been growing rapidly in Taiwan. Several new TFT-LCD panel plants began production in 2005, including three sixth-generation (6G) plants, one 5.5G plant, and two 4.5G plants. Together, they boosted Taiwan's FPD production value by 36.5 percent in 2005, to NT$972 billion (US$29.91 billion). More specifically, these plants manufacture TFT-LCD, TN-LCD, STN-LCD, organic light-emitting diode (OLED) and plasma display panel (PDP) products, with a production value of NT$706.1 billion (US$21.73 billion), as well as NT$265.9 billion (US$8.18 billion) worth of key parts.

According to the Industrial Economics and Knowledge Center, much of the momentum for the industry's growth in 2006 will be provided by LCD TV and cell-phone panel products. Global demand for LCD TV panels is expected to reach 42 million units in 2006, which are worth about US$17 billion.

To meet the growing global demand, Taiwan's panel makers need to concentrate on building plants for making 7.5G and lower-generation panels, or on expanding their existing 5G to 6G plants, instead of aiming at 8G and beyond products. This is because advanced products often involve higher technology risk, but offer a lower return on investment.

The Industrial Economics and Knowledge Center predicts that unit prices for 32-inch LCD TV sets will drop to about US$1,000, which in turn will bring the prices of 32-inch panels down to about US$500 or even US$450 each.

In the mean time, while the demand for TV panels is booming, the production value of cell-phone panels is expected to suffer a decline to about US$11.7 billion in 2006, after a 22-percent drop in their prices.