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Mainland panel makers may threaten Taiwan firms

TAIPEI--Taiwanese flat-panel makers could see their position in China threatened by local rivals by 2016, when Chinese firms are expected to begin mass producing next-generation products, a local market researcher predicted Wednesday.

Mass production of panels started at two advanced Chinese plants in the third quarter of 2011, and four others are expected to catch up by 2016, moving China forward in the panel industry, according to Delux Chen, a flat-panel industry analyst at the Photonics Industry and Technology Development Association (PIDA).

“By that point, Chinese panel makers will be more self-sufficient, so Chinese panel orders to overseas suppliers will drop significantly, meaning a big threat to Taiwan-based panel makers,” Chen said during a local industry forum organized by PIDA.

He noted that six of the advanced 8.5th-generation plants in China were set up by Chinese flat-panel makers. China is home to an additional three advanced plants, two of which were built by South Korean firms and the last by Taiwan's AU Optronics Corp. (AUO, 友達光電).

Despite mounting pressure, AUO and Innolux Corp. (群創光電), also of Taiwan, have shifted their focus to new sizes or new technologies rather than expanding their capacity, the analyst added.

According to PIDA data, Taiwan's display panel industry was worth NT$1.654 trillion (US$54.9 billion) in revenue last year, a 3.3-percent annual increase thanks to continued demand for touch panels.

Shipments of 4K Ultra-high Definition TVs to Increase Largely

The number still lagged behind a global growth of 4.7 percent, however, on demand for wider applications such as use in smartphones, tablet PCs and ultra-high definition televisions, the association said.

In a recent research report, market information advisory firm NPD DisplaySearch said shipments of 4K ultra-high definition TVs are expected to hit 12.70 million units in 2014 as prices for the cutting-edge displays falls, an immense increase from the 1.9 million units estimated for 2013.

With rising demand for 4K TVs, Innolux and AUO will serve as the world's largest suppliers of ultra-high definition screens, DisplaySearch projected.

Analysts have forecast that Innolux's 2014 shipments of 4K panels will reach 12 million units to major clients largely in China, while AUO will ship 5 million units this year to clients such as Sony Corp., Samsung Electronics Co. and some Chinese TV brands.

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