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Jason Yang, DIGITIMES Research, Taipei [Friday 9 September 2011]
There is vast demand for small- to medium-size flat panels in China as the country boasts a large-scale white-box market for small-sized handsets, portable navigation devices, MP3/MP4 players as well as medium-sized DVD players and digital photo frames. This vast market for small- to medium-size panels had previously been dominated by suppliers from Taiwan owing to makers' high sensitivity to prices and the unique ecosystem of the supply chain in China. However, China-based flat panel makers BOE Technology and Shanghai Tianma Micro-Electronics have recently optimized the production of small- to medium-size panels using their 5G production lines which had been used to produce large-size panels. They have also made new investments in 4.5G lines which are more suitable for the production of small- to medium-size panels. Therefore, Taiwan-based flat panel makers are now facing strong challenge from BOE and Tianma in China's white-box product market. Recently, the government in China has launched a series of policies aiming to consolidate the white-box industry and also encouraging white-box product vendors to develop their own brand names so as to increase the add-on value of their products. To cope with the trend, BOE has stepped up its production of high-end small- and medium-size panels for smartphones and tablet PCs, using AFFS (advanced fringe field switching) technology developed by Hydis, which is now a subsidiary of Taiwan-based E Ink Holdings. Meanwhile, Tianma has also teamed up with NEC to develop high-end small- and medium-size panels. Additionally, BOE and Tianma both plan to add investments to set up 5.5G LTPS (low temperature poly-silicon) LCD panel plants, which can also produce AMOLED panels, aiming to cope with future demand for high-end products. If the speed of design-in process of new technology and the improvement of yield rates meets with expectations, China-based flat panel makers will become a threat to rivals in Taiwan.
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