TFT-LCD Sector Faces 5% Glass-substrate Supply Gap

Taipei, March 26, 2008 (CENS)--About a 5% supply gap in glass substrates, resulting from strong demand and insufficient time for glass substrate makers' capacity expansions, is expected to compromise effective shipments of thin film transistor-liquid crystal display (TFT-LCD) panels by makers in Taiwan, Japan, and South Korea, according to industry sources.

David Chen, director of application and product engineering department under Corning Display Technologies Taiwan, confirmed that his company is truly pinched by supply shortage of glass substrates because most major customers placed urgent orders with higher-than-expected demand volumes. Chen stressed that his company would guarantee to supply customers with supply contracts with Corning, but the excessive volume required by customers would be delivered according to capacity adjustments.

Chen said that the recent glass-substrate supply shortage applies to all the suppliers of large and small sized items, stopping some panel makers' sixth-generation (6G) and 4G panel facilities to run at full capacities.

David Hsieh, president of DisplaySearch Taiwan Office and vice president of DisplaySearch Greater China, also pointed out that he estimated that the recent substrate supply gap is about 5%, causing inadequate supply at various makers-stopping full capacity production to keep safe inventories for the second quarter, a traditional high season.

According to some substrate suppliers, panel makers asked them to supply unexpected volume of glass substrates far surpassing their existing capacities. Driven by the strong demand, substrate suppliers have been actively expanding their new capacities or delaying their annual furnace-overhaul date. Corning Taiwan, for example, recently announced to pour additional US$453 million into expanding its glass substrate capacity in central Taiwan's facilities, which was the fourth-stage expansion project since Corning inaugurated the Taichung facility in 2006.

Some color-filter makers are also affected by the substrate supply tightness. Industry insiders pointed out that Japanese glass-substrate makers are expected to first deliver their products to color-filter producers from the same nation, leading to that some local color-filter makers might not produce at full capacities in the second quarter.

Regarding the latest technology development trend, Chen said that Corning's "Jade" glass demonstrated recently can work with two key display technologies, low temperature polysilicon (LTPS) applications and organic light-emitting diodes (OLEDs), to help solve some of the challenges facing the mobile device industry. Unlike glass substrates made by other suppliers, he added, "Jade" needs no secondary heat treatment or polishing to meet the demanding surface and thermal stability requirements of the LTPS and OLED manufacturing process (lower cost).

Such new glass, the director said, is expected to help TFT-LCD panel makers cut their costs and further extend their market shares in the small/medium-sized market.