AMTC, Quanta Display to set up sixth-generation color filter venture

Taipei, March 1, 2004 (CENS)--Allied Material Technology Corp. (AMTC), a leading color filter maker in Taiwan, recently announced plans to jointly set up a sixth-generation color filter plant with Quanta Display Inc., a local thin film transistor-liquid crystal display (TFT-LCD) panel maker.

AMTC president Arthur Chou said that the detail of the cooperation project between AMTC and Quanta Display would be publicized soon.

According to Chou, AMTC originally planned to cooperate with Quanta Display to set up a fifth-generation color filter plant in Taiwan, but finally decided to establish a sixth-generation plant, as too many counterparts are planning to build fifth-generation plants, including Toppan CFI Taiwan Co., Ltd., South SinTek Photronic Corp. and local panel makers AU Optronics Corp. (AUO), Chi Mei Optoelectronics Corp. (CMO) and HannStar Display Corp.

Chou refused to further comment on the technical sources for the new color filter venture with Quanta Display. But he said that the color filter involves a material-oriented production, the top priority of which is to control the photo-resist and surface-coating techniques.

Industry sources said that the supply of color filters will be tight this year in both Taiwan and other TFT-LCD panel production nations due to the active expansion of new-generation production capacities by panel makers. More and more local panel makers and downstream information technology (IT) makers are actively allying with color filter suppliers to secure ample supply of such key parts for panel production, the sources said.

For instance, AUO has invested in the local Cando Corp.; Quanta Computer Inc., Hon Hai Precision Ind. Co. Ltd. And Compal Electronics Inc. have strategically invested in AMTC; and HannStar, SinTek Photronic Corp. of Taiwan and Dai Nippon Printing Co., Ltd. (DNP) of Japan have jointly set up the South SinTek Photronic Corp.--a color filter production venture.

In addition, local panel maker Chunghwa Picture Tubes, Ltd. (CPT) is scheduled to set up a 4.5th-generation color filter plant on its own; and color filter producer SinTek Photronic Corp. will also establish a new 4.5th-generation color filter facility.

Amid tight supply of color filters, the sources said, many TFT-LCD panel makers in South Korea and Japan also came to Taiwan seeking possible color filter capacities. In a bid to separate customers and further tap the international market, some local color filter makers said they would strive to spare some capacity to serve the foreign customers, though their capacities have all been booked.

AMTC said that currently the ordered volume is twofold its capacity, hitting 135,000 filters per month. The company plans to pour about NT$1.1 billion (US$33.13 million at US$1: NT$33.2) to expand the capacity at its fourth-generation color filter plant by 50%. The expansion project is scheduled to be completed in August this year, when AMTC will see shipment volume increase by 45,000 color filters per month. AMTC expects to ship a total of 1.6 million color filters this year.

AMTC said that it expects to have annual revenue of NT$6.8 billion (US$204.82 million), net profits of NT$1.47 billion (US$44.34 million), and profit margin of 21.5%, up from last year's 10.68%. Some institutional investors, however, estimated that AMTC's business results this year will be better than the firm's projection due to the strong demand and expected price hikes.

AMTC pointed out that the overall color filter supply in Taiwan is expected to be 30% short of the demand this year, including a supply shortage of 45,000 filter in the 3.5th-generation products (275,000 (demand)/230,000 (supply)); 130,000 in fourth- and 4.5th-generation (340,000/210,000); and about 600,000 in fifth-generation products.