When it comes to display production, Taiwan and Korea have long been the leaders, with a particular expertise in flat-panel displays and LCDs. Recently, though, Chinese display producers seem to be poised to narrow the competitive gap.
In the last few weeks, some headlines coming out of Asia point to China's increased focus on display development and production investments.
Last week, for instance, there was news that coatings and specialty products maker PPG Industries has ramped up fiberglass manufacturing in China. The Shanghai-based company announced that PFG Fiber Glass (Kunshan) Co., Ltd.– its joint venture in Kunshan, China, with Nan Ya Plastics Corp. — started a fourth furnace. With 38,000 metric tons of annual capacity, the additional furnace will serve the expanding Asian electronics industries. C.F. Lee, general manager of PFG Fiber Glass (Kunshan) Co., Ltd., said:
The printed circuit board industry continues to grow in Asia. Nan Ya built a vertically integrated production campus in Kunshan that included resin, copper foil, glass fabrics, copper-clad laminates and printed circuit boards. With this expansion, we will continue to support the demands of our business at this location as well as the larger electronics industry.
Ramp-ups like this have caused some increased worry among the Taiwanese. The Taipei Times paper reported last week:
The rise of China's LCD panel makers is posing a growing threat to Taiwanese panel suppliers and may narrow the once wide gap between the two nations' display industries as local firms struggle to upgrade their technologies to safeguard their technological lead.
And, there are ongoing concerns about unfair competitive practices and intellectual property leaks as Chinese rivals rapidly close the gap and present a growing threat to longtime display producers. Citing again the Taipei Times, Taiwanese electronics giant AU Optronics Corp. recently filed a lawsuit against two former executives who were previously in charge of developing advanced technologies. AUO alleges that they leaked company secrets to their current Chinese employer, China Star Optoelectronics Technology Co. (CSOT), “the second-biggest LCD panel maker in China and the only Chinese firm operating an advanced 8.5-generation factory like its bigger Taiwanese rivals,” the paper said.
Taiwan Today paper reported that CSOT's 8.5-generation panel plant will be capable of producing 24 million 32-inch television panels annually, and that the company is also expected to invest in an experimental production line, which will attempt to make next-generation active-matrix organic light-emitting diode (AMOLED) products.
For the Taiwanese, the stakes are pretty high, moneywise at least, if production demand shifts to China. Taiwan's flat panel display production was $12.5 billion in the third quarter, a 12.5 percent increase from the previous quarter, according to Digitimes, citing reports from Industrial Economics & Knowledge Center (IEK). IEK estimates that FPD production value will grow sequentially by 7.1 percent in the fourth quarter.
If nothing else, China's growing position in the display space will force competitors to stay on their toes. We'll see how they fight back.