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Digitimes Research: ITO film price drop to slow metal mesh penetration in mid-size touch applications
Jason Yang, DIGITIMES Research, Taipei [Tuesday 15 April 2014]

Metal mesh technology has entered mass production at some China-based touch panel makers, such as O-film, since the second half of 2013. It helped O-film become the largest notebook touch panel supplier in the world in the fourth quarter of 2013, thanks to its pricing advantages. Lenovo was one of the early adopters of metal mesh touch panels for its notebooks.

Following its sucess in the notebook market, O-film is looking to expand into the 8- to 10-inch medium-size segment in 2014. But Digitimes Research believes the metal mesh sector will have to step up efforts defending its stronghold at the 13- to 15.6-inch segment against traditional GFF applications starting from the second quarter of 2014, as ITO films' pricing has been dropping and resistance issues have also been improving.

ITO film's high resistance has prevented GFF touch panels from entering the 13-inch and above segment, while costs of OGS touch panels are too high.

The major drawback of metal mesh touch panels is that users are able to see the internal touch sensor on screen, but such an issue is not much of a problem for larger-size applications and therefore the technology has been considered the most suitable solution for large-size applications, such as touchscreen notebooks and all-in-one PCs.

China-based makers, such as O-film, started mass producing related touch panels in the second half of 2013 and have been gradually expanding their shares in the notebook touch panel market. However, Taiwan players, such as TPK, which originally expected demand for OGS-based notebook touch panels to pick up, have suffered losses and reduced the related capacity to minimize the damage.

Having resolved the problem with touch sensor visibility of metal mesh technology, O-film is looking to expand into the 8- to 10-inch tablet touch panel market in 2014 and enter Samsung Electronics' supply chain. However, initially, O-film will mainly supply touch panels for Intel-based white-box tablets.

Meanwhile, Japan-based Fujifilm has been reducing the price of its metal mesh touch sensors, which are shipped mainly to touch panel makers, such as Taiwan-based Young Fast and China-based Eely, for their production catering to first-tier vendors including NEC and Dell. In the future, the Japan-based maker may become a strong competitor of O-film vying for Samsung's orders.

ITO film makers, such as Japan-based Nitto Denko, have cut their ITO film prices down from an average of CNY300 per square meter originally to only CNY200 recently, with films' resistance values having also been reduced from 150-200Ohm/square to 100Ohm/square. The improvements have enabled ITO films specifically for 13- to 15.6-inch notebook touch panels and the films are already available in the market.

Although GFF technology is still unable to match metal mesh technology in the 13- to 15.6-inch large-size touch panel segment in terms of material costs, limited metal mesh-based touch panel supplies and GFF technology's high yield rate thanks to its relatively mature manufacturing process may turn some downstream vendors to adopt GFF technology instead.

For the medium-size segment, where ITO films' resistance is almost not an issue, GFF technology has advantages over metal mesh technology in terms of material costs, hindering metal mesh's expansion into the medium-size segment.

Content from this article was part of a complete Digitimes Research Chinese-language report that has not yet been translated into English. If you are interested in an English version of the report or wish to receive more information about the report, click here to contact us and we will get back to you as soon as possible. Digitimes Research also provides quarterly tracking services for market sectors such as Global Tablet, China Smartphone, China Smartphone AP, Taiwan ICT and Taiwan FPD. Click here for more information about Digitimes Research Tracking services.

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