Taiwan will reclaim top position in worldwide TFT-LCD panel market from Korea in 2006
After briefly taking the lead in 2004, Taiwan is expected to reclaim the top position in the worldwide TFT-LCD panel market in 2006, when its shipments outstrip those of its chief rival, South Korea.
South Korea and Taiwan are engaged in a close race for leadership in large-sized TFT-LCD panel production, with the two nations battling it out quarter-by-quarter to determine which one will be king of the LCD market.
In widely publicized comments made in May, 2004, Derek Lidow, president and chief executive officer of iSuppli, said that Taiwanese manufacturers’ prodigious capital spending is putting them in position to challenge the South Korean’s established leadership in TFT-LCD panel production.
In the second quarter of 2004, the Taiwanese did pass the Koreans, with the island nation’s manufacturers accounting for 45.3 percent of unit shipments, compared to the Korean producers’ 44.5 percent share, according to iSuppli data.
During the remainder of 2004, Korean LCD manufacturers boosted their investment in TFT-LCD production. By the third quarter of 2004, shipments from the two nations were virtually tied, with Korean producers accounting for 44.8 percent of global shipments, and Taiwanese for 44.3 percent. Korean companies reasserted their leadership in the fourth quarter, shipping 47.2 percent of shipments, compared to 43 percent for Taiwan.
For 2004 as a whole, Korean companies accounted for 46 percent of shipments, while Taiwanese had 44 percent.
iSuppli predicts that the competition will remain extremely close in 2005, with Korean companies holding onto the lead, and in 2006, when Taiwan’s manufacturing output will allow it to reach the top spot.
The actual output of TFT-LCD fabs is impacted by several different variables, including the substrate size, throughput, manufacturing yield and product mix.
Taiwanese manufacturers have had the largest TFT-LCD raw-area capacity, i.e. the product of substrate size and throughput, since 2004, and are building fabs at a faster pace than are the Korean manufacturers.
Last year, Taiwan possessed 40.6 percent of worldwide TFT-LCD area production capacity, compared to 36.3 percent for South Korea, representing a 4.3 percentage-point gap, according to iSuppli data. In 2005, that gap is expected to expand to 12 percent, before contracting slightly to 11.3 percent in 2006.
If capacity is added as planned, Taiwan's sustained advantage in production will allow it to take the lead in TFT-LCD shipments from South Korea in 2006, iSuppli predicts.
By the end of 2005, iSuppli expects that 24 TFT-LCD fabs will be operational in Taiwan, and 19 in Korea.
The stakes in the battle for large-sized TFT-LCD leadership are far greater than national bragging rights. The TFT-LCD market represents one of most important segments of the worldwide electronics industry, with products enjoying booming sales in markets like desktop PC monitors and televisions. Thus, the strong expected growth of the display market will deliver enormous benefits to the nations and companies that dominate the TFT-LCD market.
