Toppoly, Philips MDS to Set Up New Venture in Shanghai

Taipei, June 8, 2006 (CENS)--Taiwan's Toppoly Optoelectronics Corp. has been approved by the Investment Commission under the Ministry of Economic Affairs (MOEA) to invest in the Shanghai unit of the Mobile Display Systems (MDS) of Royal Philips Electronics NV.

Toppoly is a leading maker of low temperature poly-silicon (LTPS), small- and medium-sized thin film transistor-liquid crystal display (TFT-LCD) panels in Taiwan. With the new investment, the firm will be the first and only small- and medium-size TFT-LCD panel maker to run a venture to mainland China. In late April, Taiwan government decided to allow the establishment of ventures on the mainland to engage in low-end chip packaging and testing services and production of TFT-LCD panels measuring 4-inch or smaller.

In November 2005, Toppoly and Philips signed a binding letter of intent for the latter's MDS business unit to merge with Toppoly to secure a leading position in mobile display technology. The company, in which Taiwan's Compal Electronics Inc. owns a 25.1% stake, Taiwan's Uni-President Enterprises Corp. 3.5%, and Philips 17.5%, will soon start operation and be named "TPO" this month.

Toppoly president Ray Chen pointed out that the new TPO would own a consolidated monthly shipment of over 10 million units, making it one of the world's top three maker in the line.

According to Chen, the merger project is expected to generate customer-compensation effects for both Toppoly, which already owns many OEM/ODM customers, and Philips, which supplies panels to many international big cell-phone brands such as Nokia, Motorola, Sony Ericsson, LG etc.

Chen claimed that Toppoly shipped over five million small-sized panels in March, while Philips' MDS business unit delivers an average of five million to six million units per month. Accordingly, he said, the consolidated monthly shipment is expected to outstrip 10 million after the formal merger.

Statistics compiled by DisplaySearch, the worldwide leader in flat panel display (FPD) market research and consulting, showed that Samsung SDI Co., Ltd. Of South Korea got a 18.8% share of global cell-phone panel market in the first quarter, followed by Sanyo Epson (12.2%) and Sharp (10.3%). The data showed that Philips and Toppoly's market shares were 9.2% and 3.2%, respectively, implying that TPO might have the chance to become the world's No. 2 or even No. 1 supplier in its line in the second quarter.

Global Cell-phone Panel Market (Q1, 2006)
Company	Share
Samsung SDI	18.8%
Sanyo Epson	12.2%
Sharp	10.3%
Philips	9.2%
Wintek	8.4%
Samsung	6.3%
S II	5.3%
Giantplus	4.9%
TMD	4.9%
Toppoly	3.2%
Others	16.5%
Total	100%
Source: DisplaySearch