Summary
(1) Sharp has commenced production in 10G plant and is a signal for Samsung, AUO, LG and Chi Mei.
(2) Leaders in LCD manufacturing will focus on large size LCD panels
(3) Small and Medium LCD panel manufacturing will drift to China.
Analysis
Sharp has commenced the production of LCDs in its $3.9B invested 10G plant. Sharp is not number 1 LCD manufacturing but is certainly now No.1 in large Gen LCD manufacturing employing 'multi-domain' LCDs. Glass substrates of size 2,880 mm x 3,130 mm will be handled in this plant. The 10G is very efficient for manufacturing 65" diagonal size LCDs. 10G glass size will yield 8 substrates of 57" diagonal and 10 substrates of 46" diagonal (two substrates constitute one LCD). Compare this to 8G which will yield 3 substrates of 57" and 8 substrates of 46".
8G plant handles glass plate size of 2200 mm x 2500 mm.
AUO had plan of constructing 10G plant and commence production in 2011-2012 but delayed the construction. What will be AUO's strategy now after Sharp starting production with 10G plant? Samsung had plan to build 11G plant next to 8G plant skipping 10G plant. What will be Samsung's strategy? Chi Mei started construction of 8.5G plant and stopped it. What will be its strategy now? LG display, No.2 in LCD manufacturing had not decided to expand its 8G production facility in July 2009. What will be its strategy now? Another point that is relevant to consider is the difference between 8G line and 8G plant.
In the midst of this there were reports on Tianma Microelectronics starting to construct 4.5G plant and Toshiba Matsushita Display shifting its 2.5G and 3.5G plant to Gangdong China to commence production in 2010.
In long term it appears that the leaders in LCD manufacturing will be concentrating on large size panels and the manufacturing of small to medium size panel will drift to China. Certainly the manufacturing of large size LCD panels will stay with the leaders for the next five years at least.
Munisamy Anandan consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
