2008-2009 TFT LCD Production Will Be Enabled By Plentiful Supply Of Glass Substrates, DisplaySearch Predicts

[The following is a release from Display Search]

June 29, 2008

DisplaySearch, the worldwide leader in display market research and consulting, revealed in its recent release of the Quarterly LCD Glass Substrate Report that there appears to be no constraint on TFT LCD panel production for PC and TV applications this year or next. 20 tanks of TFT LCD glass substrate capacity will come on-line in 2008. TFT LCD panel makers will increase their process-area capacity about 25% this year, while their glass suppliers will increase gross substrate area capacity about 32%. Not all of the glass tank capacity will be used fully in 2008. Enough glass capacity was used to increase the substrate area shipped 55% from Q1'07 to Q1'08, however. Corning and its Samsung Corning Precision Glass joint venture remained the leading TFT LCD substrate supplier in Q1'08 with a 53.1% area share. Japan-based Asahi Glass and Nippon Electric Glass followed with area shares of 23.7% and 18.4%, respectively. These suppliers have benefitted from the resurgence of TFT LCD activity in Japan, but the report forecasts their area shares will peak this year and fall slightly in 2009. A special-purpose vehicle of Carlyle Group took control of a third Japan-based glass supplier recently. The former NH Techno Glass business had tanks in Japan and Singapore that had a 4.9% area share in Q1’08. DisplaySearch expects these tanks will remain in operation as Carlyle restructures the business. A fifth supplier, SCHOTT of Germany, exited the market in Q1'08 The price forecast for TFT LCD substrates by area shows a modest rate of sequential decline this year. The area price of Gen 8 substrates (2850 mm × 3250 mm) fell 3.4% in Q1'08, but DisplaySearch expects that decline will moderate to 2.8% per quarter by year end. The area price of Gen 8 glass carried a 20% premium over Gen 6 substrate prices last quarter. Given the heuristic of glass being 25% of material cost for a large TFT LCD module, the Gen 8 substrate premium raised material cost about 5%. TFT LCD makers offset this premium with overhead and depreciation cost reductions in newer fabs. Over time, the cost premium for Gen 8 glass will diminish and provide leading panel makers with better cash-cost positions. Additional details from Q1'08 as well as forecasts through Q1'10 are covered in DisplaySearch’s Quarterly LCD Glass Substrate Report including TFT LCD glass sector contributions to supplier profits.

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