Will Small TFT LCD Panels Continue to be Produced in Large Size LCD Factories?

By Shawn Lee, Analyst, DisplaySearch

When 16:10 panels came into the market in 2006, panel makers began to produce monitor panels in Gen 6 and even Gen 7 TFT LCD factories for efficient production. Now that 16:9 panels are coming, most monitor panels are being produced on Gen 6, Gen 7 and even Gen 8 lines. This also enables second-tier panel makers who do not have multiple generations to produce smaller panels. Let’s take a look at how panel makers are reallocating production strategies:

• At the end of Q1’09, Samsung began mass production of 21.5”W and 18.5”W 16:9 monitor panels in their Gen 8 factory, where they can make 35 and 50 panels per glass substrate respectively. Samsung does not have a Gen 6 line, and most 16:9 monitor panels are optimized for Gen 6 factories.

In 2008, Samsung was producing notebook panels in their Gen 3 and Gen 4 factories. When Samsung Mobile Display (SMD) was separated from Samsung LCD, they took the Gen 3 and Gen 4 lines, and notebook panel production was transferred to Gen 5 for optimized production. For mini-note (netbook) panels, Samsung is using their L5 Line (1100 x 1250 mm).

• Unlike other first-tier panel makers, LG Display does not have a Gen 5 line (1100 × 1300 mm), so it produces most of its notebook panels on its P4 (1000 × 1200 mm) and P5 (1100 × 1250 mm) lines. LG Display has produced 15.4”W notebook panels on its Gen 6 line and 19”W monitor panels on its Gen 7. With their Gen 8 line ramped up in the beginning of 2009, they plan to produce 16:9 monitor panels.
• Besides following Korean panel makers’ production strategy by producing notebook panels on their Gen 5 line, AUO is also planning to produce 16:9 monitor panels in their upcoming L7B Line (1950 × 2250 mm) at the end of Q2’09. AUO believes a flexible production strategy in advanced-generation factories enables efficient production.
• CMO’s Gen 5.5 (1300 × 1500 mm) is suitable for producing monitor panels, whether 16:10 (including 22”W) and 16:9 (including 18.5”W and 21.6”W). Although CMO produces most notebook panels in its Gen 5 factory, CMO does not produce monitor panels on its Gen 7 line, making it the only first-tier panel maker to not do so. CMO plans to produce 23.6”W 16:9 monitor panels on their Gen 6 line in 2H’09.
• Second-tier panel maker HannStar is aggressively moving to produce small/medium panels in their only Gen 5 factory. Besides mini-note panels, HannStar mass-produced 7”W panels in 2008. HannStar is now moving to produce 5” panels for portable navigation devices and possibly 4.3” or even smaller sizes on their Gen 5 line.

When first-tier panel makers are producing monitor panels on Gen 7 or Gen 8 lines, and notebook panels on Gen 5 lines, how do second-tier panel makers compete with single Gen 5 factories? Producing smaller-size panels is the best solution. It is likely that we will see increased production of smaller size panels in large generation factories in the future, since first-tier makers have to try to increase market share to digest their capacities.