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Chinese Display Suppliers Flex Muscles

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.

5 comments on “Chinese Display Suppliers Flex Muscles

  1. FLYINGSCOT
    December 2, 2012

    I suppose this is akin to what happened in Japan where production moved offshore and Japan struggled.  However There wil lalways be room for everyone provided they maintain a set of excellent design or manufacturing skills.  One needs to be the 1st or 2nd best in anything one does to survive in a global market.

  2. Barbara Jorgensen
    December 3, 2012

    AU was recently raked over the coals by the US DOJ for price-fixing as well. Taiwan is right to worry about practices that some China businesses see as SOP. These tactics aren't accepted outside of China but they stack the deck in China's favor. The other issue is Chinese companies tend to be more vertically integrated, and this may be an advantge as outsourcing becomes more and more complicated (and therefore expensive.) But I haven't had any first-hand experience with China – developed -and -made LCDs. If the quality is good, watch out.

  3. Daniel
    December 4, 2012

    Jennifer, we know that Chinese people are capable to do the marketing, but the question comes about quality of Chinese products. Most of the products from Taiwan and Korea are of high quality and obliviously with a little more price tag. Since pricing is the primary filtration factor, chine's products may get flourished very soon.

  4. Daniel
    December 4, 2012

    Flying scot, in global market “Survival for the Fittest” and maximum profit are the motto for all companies. There won’t be any such attachments or considerations.

  5. SemiMike
    December 9, 2012

    Speaking of History:  The Fair Trade vs Free Trade arguments and the famous tariff wars that protected rich countries until they were so rich, they could “be generous” and “allow free trade” meaning they would not tolerate any tariffs against THEM to protect poor country agriculture, for example, are still not widely discussed nor represented well in international law.   Trade is neither free nor fair.  Countries behave much like corporations to advantage of their shareholders.

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