Since the 1970s, Taiwan and South Korea have been parallelly developing semiconductor and new-geneation IT industries. The national conditions and industrial strength of the two countries are very similar. During the Cold War, Taiwan and South Korea were part of the first island chain facing the communist world. Now the US and China are rivals that compete head to head with not only weaponry, but also the strength of the technology industry, the most representative of which is the semiconductor industry and the ubiquitous supply chain. About 60% of Taiwan's and Korea's semiconductor exports go to China. In 2020, China imported as much as US$350 billion of semiconductors, with about half of them from Taiwan and South Korea. Taiwan and South Korea both export enormously to China on the one hand, and vie for the industry leadership position on the other. South Korea specializes in memory, but Taiwan's industry structure is more diverse: wafer foundry, IC design, packaging and testing. Taiwan and South Korea dislike each other but also rely on each other.
Viewing that prices for TV-use LCD panels began to drop significantly in August 2021, China-based LCD panel makers BOE Technology and China Star Optoelectronics Technology (CSOT) as well as LG Display began to reduce the production of such panels in September, a bid to prevent such prices from dropping further, according to industry sources.
Shenzhen Laibao Hi-Tech, a China-based maker of ITO conductive glass, color filters as well as OGM (one glass metal mesh) and OGS (one glass solution) touch panels, will step into the production of LCD modules with an investment of CNY250 million (US$38.5 million) to set up a factory in Chengdu, western China, according to industry sources.
Some Taiwan-based LCD driver IC suppliers have claimed their book-to-bill ratios remain above one with clear order visibility through the end of this year and even 2022, in response to recent reports indicating LCD panel prices have started falling due to a slowdown in TV and other end-market device demand.
Government-developed Hsinchu Science Park (HSP), Southern Taiwan Science Park (STSP) and Central Taiwan Science Park (CTSP) generated combined revenues of NT$1,712.828 billion (US$61.28 billion) in first-half 2021, growing 25.20% on year, according to Ministry of Science and Technology (MOST).
Chances are slim for LCD TV panel prices to plunge to the cash cost level and Taiwan panel makers are now much more immune to the ongoing round of price falls amid changing industrial structures and their increasingly robust financial strength, according to Paul Peng, chairman of AU Optronics (AUO).
Innolux shipped 40.50 million TFT-LCD panels in August, consisting of 12.71 million large-size units and 27.79 million small- to medium-size units which increased 3.5% and decreased 2.3% on month respectively, according to the company.
AU Optronics (AUO) shipped LCD panels totaling 2.171 million square meters in August, increasing 3.6% on month, but its consolidated revenues for the month decreased 1.91% sequentially to NT$32.710 billion (US$1.17 billion) due to panel price declines.
Taiwan recorded a total export value of US$39.55 for August 2021, hitting a monthly record for the second consecutive time with a growth of 4.2% on month and 26.9% on year. The corresponding total import value of US$36.08 billion was also the historically highest monthly figure and rose 12.6% on month and 46.3% on year, according to the Ministry of Finance (MOF).
LCD driver IC design houses will hike quotes to reflect continually increased costs for wafer foundry services but have been faced with reluctance from clients, LCD panel makers, because panel prices have kept falling since the end of the second quarter of 2021, according to industry sources.
In view of the high growth in demand for TVs in India, India Cellular and Electronics Association (ICEA) recommends that the India government set up local TV supply chains. As it is not easy to set up a local TV panel supply chain competitive in production cost in India, the transfer of panel technologies from overseas panel makers could be a feasible strategy.
Chip shortages have been troubling many vendors, including Apple, whose much anticipated miniLED-backlit MacBook Pro series may be unveiled later than expected. The electric vehicle market looks so promising that many companies are eager to have a share, including Chinese handset vendor Xiaomi, which has just set up an EV business. LCD TV panel prices had soared for months until recently, and they are expected keep falling till year-end 2021.
LCD TV panel prices have been falling at a rapid pace since August, and may continue dropping until year-end 2021, as demand for TVs in developed countries has been declining and most of TV vendors have decreased panel procurement, according to industry sources.
Semiconductor production cost is set to rise further, as the world's number pure-play foundry, TSMC, has notified clients that its quotes will rise 10-20% starting next year. Silicon wafer supplier GlobalWafers has reported clear order visibility till year end 2022. In the display sector, China-based panel maker CSOT has started moving in equipment at a module plant in India.
China Star Optoelectronics Technology (CSOT), a display panel maker belonging to the China-based TCL Group, recently held a ceremony for starting the installation of production equipment at its panel module factory in Tirupati, southeastern India, according to industry sources.
Small- to medium-size LCD panel and module maker Giantplus Technology has been adjusting product mix by hiking revenue proprotions for niche-market and car-use applications in a bid to hike overall profitability, according to the company.
Taiwan recorded manufacturing production index (2016 as base year) of 137.34 for July 2021, decreasing 1.90% sequentially but increasing 15.02% on year, according to Ministry of Economic Affairs (MOEA).
The move of GF's plan for IPO is more likely to happen in the near future, which might make Intel's buyout plan vanish. Two OLED panel suppliers in China are expanding their panel capabilities which tell the adoption rate of OLED panels in smartphone brands, including Samsung, Xiaomi, Oppo, is getting higher. LCD panel makers; on the other hand, are transforming to focus on more value-added products.