Price competition for polarizer to burst in Taiwan

Taipei, Aug. 12, 2005 (CENS)--A serious price-cutting competition is expected to be triggered in the market for polarizer in Taiwan by the growing supply capacity of the key component needed for the production of liquid crystal display (LCD) panels, according to industry sources.

The sources said Nitto Denko Corp. of Japan just inaugurated a new polarizer plant in Central Taiwan Science Park (CTSP), while the second Southern Taiwan Science Park (STSP) polarizer plant of Sumika Technology Co., Ltd., a local joint venture between Japan's Sumitomo Chemicals and Inabata & Co., Ltd., is scheduled to begin mass production this month.

Currently, Taiwan-based Optimax Technology Corp. is the largest supplier of polarizers, but its leading position is facing fierce challenges from new Japanese rivals.

Industry sources said that the prices of polarizers were more stable than those of other key parts for LCD panels in the first half of the year, when all panel makers required parts suppliers to cut costs, due to the supply shortage of the tri-acetyl-cellulose (TAC) films, a key element for polarizer. The tight supply of TAC-films is expected to ease in the fourth quarter, according to AU Optronics Corp. (AUO) executive vice president Lu Po-yen, as major suppliers Fuji and Konica have been gradually increasing their capacities.

The sources added that currently Nitto Denko accounts for 40% to 50% of the global polarizer supply, while Sumitomo Chemical and Sanritz Corp. about 20% and 15%, respectively. The remainder is shared mainly by Optimax of Taiwan and LG Chemicals of South Korea. In the Taiwan market alone, Optimax is the No. 1 polarizer supplier with a share of about 50%, followed by Nitto Denko with 30% and Sumika 15%.

Nitto Denko originally operated only a rear-section cutting plant in central Taiwan's Taichung Industrial Zone, but last year the company decided to set up two plants in CTSP with complete front-section production lines at a total cost of NT$2.24 billion (US$70.44 million at US$1: NT$31.8). Nitto Denko inaugurated its first CTSP facility over one week ago and the company is expected to have revenue of NT$10.6 billion (US$333.33 million).

Sumika's second plant in STSP is scheduled to start production soon, its two facilities in the park are expected to record a total monthly capacity of about 800,000 square meters of polarizer starting from October.