Government to upgrade TFT-LCD equipment local-content rate to 50%

This article was published by the Taiwan Headlines on March 20, 2006. According to this article, the government in Taiwan recently decided that the two major goals for the country's TFT-LCD industry should be to cultivate local talent and to increase local content.

Specifically, the government has set the target to boost local content ratio of panel-production equipment to 50 percent, from the current 10 percent. This is expected to further enhance the vertical integration in the local panel industry.

The government plans to provide guidance for major makers of precision machinery, such as computer numeric control (CNC) machining centers, in the Taichung Precision Machinery R&D Industrial Park. The aim is to enable these makers to diversify into panel-manufacturing equipment, and to form close cooperation with TFT-LCD panel makers in the neighboring Central Taiwan Science Park. Such cooperation is expected to form a more comprehensive industry cluster in central Taiwan.

The government's plan is to help Taiwan's "Two Trillion N.T. Dollar Industries" - the TFT-LCD panel and semiconductor industries. Both industries have encountered problems in recent years, such as their low level of raw-material independence and the low loca-content ratio of their manufacturing equipment.

Because Taiwan is now one of the world's most important TFT-LCD panel production bases, it is important that panel makers are encouraged to evaluate merger possibilities for higher competitiveness. The government also needs to cultivate more talented professionals to meet the strong demands from the industry.