China to pass Japan LCD panels

With new, higher-generation TFT LCD fabs set to ramp up in China, Chinese TFT LCD suppliers are indicating expanded production plans. As a result, China is expected to surpass Japan in large-area TFT LCD panel production in Q2’11, according to the latest DisplaySearch Quarterly Large-Area Production Strategy Report.

Large-area TFT LCD panel production by Chinese makers, including mini-note, tablet PC, notebook, monitor and TV applications, was 2.7 million units per month in Q1’11, compared with 3.2 million units per month from Japanese makers. However, China will increase to 3.4m units in Q2’11, while Japan is expected to fall to 2.3m units. China is also expected to be higher than Japan in unit production from Q3’11 to Q1’12.

Korean makers continue to be the leaders in large-area TFT LCD production, accounting for approximately half of global output, followed by Taiwanese makers, who account for about 40%.

On an area basis, Japan will remain larger than China for some time, as there are higher generation fabs, including Gen 6, Gen 8 and Gen 10, in Japan. However, Chinese companies like BOE, ChinaStar and CEC-Panda will be ramping up Gen 6 and Gen 8 fabs within the year and there will be more expansions in 2012.

Chinese TFT LCD makers still lag behind counterparts in Korea, Taiwan and Japan in new technology implementation but several new production strategies are being pursued:

Panel makers have set high production goals for 2011, including 222m monitor panels, 242m TV panels, 106m mini-note/tablet PC panels, and 197m notebook panels, for a total of a 775m unit production target.

Sharp, LG Display and other panel makers will start producing tablet PC panels in Gen 8 using array and thin glass technologies. In 2011, 10% of Gen 8 capacity is being allocated to produce tablet PC panels.

The majority of the fabs producing mini-note and tablet PC panels will be Gen 5 and below, which accounted for 90% of these panels in Q2’11, while Gen 6 and Gen 8 accounted for 10% during that period. According to panel makers’ production plans, in Q1’12, 25% of mini-note and tablet PC panels will be made in Gen 6 to Gen 8 lines.

CEC-Panda, which has acquired capacity and technology from Sharp, will not only make LCD TV panels in its Gen 6 line, but will also allocate 27% of its capacity for LCD monitor panels.

While Korean and Japanese panel makers like Samsung, LG Display and Sharp are allocating some of their Gen 8 capacity to non-TV applications, Taiwanese Gen 8 owners AUO and Chimei Innolux are allocating 100% of their lines to LCD TV applications.

HannStar will allocate more than 50% of its capacity to small/medium panel production. This indicates that HannStar is becoming more of a small/medium panel maker than a large-area panel maker.