LG eyeing Taiwan's polarizer market

Dec 22, 2003 Ι Industry In-Focus Ι Electronics and Computers Ι By Ken, CENS
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Taipei, Dec. 22, 2003 (CENS)--LG Group of South Korea recently inked an agreement to co-open a polarizer-making venture in Taiwan with Taiwanese color-filter supplier Allied Material Technology Corp.

LG executives pointed out the excessive demand for the opto-electronics material by Taiwanese thin-film transistor liquid-crystal display (TFT-LCD) manufacturers is the major reason behind their company's involvement in the Taiwan market. Taiwan is estimated to account for 35% of world's total demand for 15-inch polarizers, projected at 100 million systems, throughout this year.

They vowed to snatch up around 20% of Taiwan's polarizer market, which has long been dominated by Japanese suppliers and their Taiwanese affiliates, next year and become the island's No. 1 supplier of the material by 2006 with market share of 50%.

LG executives analyzed that there exists a large room for the growth of the Taiwan market as many Taiwanese TFT-LCD suppliers have recently announced bold expansion plans to keep up with thriving demand worldwide.

The joint venture will be capitalized at NT$200 million-NT$300 million (US$5.8 million-US$8.8 million) and begin production in April next year at a 6,500-ping factory in Chung-Li city in northern Taiwan. The venture is designed to cut and test polarizers supplied by LG. The South Korean supplier's Taiwan branch will be in charge of marketing.

The venture's executives estimated the company's operation to likely break even in third quarter next year.

LG is now the world's second-largest supplier of the material, trailing only Nitto Chemical Industrial Co., Ltd. Of Japan. It projected its polarizer revenue to double next year, to US$450 million, from this year. The company set up its first line of the material in 1999 and now operates three lines.

Optimax Technology Corp., currently Taiwan's largest supplier of the electronics material with a market share of 55%, is confident of retaining its leading position in Taiwan market over the next few years. The company's executives pointed out that the LG-Allied Materials venture will need at least one to two years to build factory and tune defect-free ratio.

Local industry insiders pointed out that Optimax now has output capacity of 20.6 million square meters of the material by the end of this year, far more than LG's projected 3.7 million square meters. They pointed out that the South Korean supplier's poralizers have only gone to affiliates Hydis and LG Philips.
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