Gen 8 now the most important fab for LCD TV panel production

SANTA CLARA, USA: As panel makers expand, they are increasingly utilizing Gen 8 fabs for LCD TV panel production.

According to the latest Quarterly Large-Area Production Strategy Report, 41 percent of LCD TV panels were production on Gen 8 lines in Q3’10, a leap from 35 percent in Q2’10.

The share is expected to grow to 42 percent in Q4’10 based on panel makers’ plans. Meanwhile, 6 percent of notebook PC panels were made on Gen 6 lines in Q3’10, and will increase to 9 percent in Q4’10.

Shawn Lee, senior analyst for TFT LCD production strategy at DisplaySearch, said: “The evolution of fab generations in the TFT LCD industry is not only a shift to larger glass substrates but also involves moves to increase production efficiency. For example, 32”W LCD TV panels were originally designed to be made in Gen 6 fabs, but more than 70 percent of the 32”W are currently produced in Gen 8 fabs and Gen 6 fabs have gradually shifted to LCD monitor panel production.”

Lee continued: “The recent adoption of 0.5 mm glass substrates in Gen 6 and larger fabs also enhances production flexibility, as panel makers can make notebook and monitor panels in Gen 6+ fabs using the same glass thickness as in smaller fabs. The 16:9 aspect ratio prevailing in PC displays also enables Gen 5 and 6 fabs to produce notebook and monitor panels, respectively.

For example, panel makers like AUO, CPT and LG Display are starting to produce notebook PC panels in Gen 6 fabs, while AUO, LG Display and Samsung are producing LCD monitor panels in Gen 7 fabs, and Samsung and LG Display are producing LCD monitor panels in Gen 8 fabs. This flexibility benefits panel makers as they can more effectively leverage their existing capacities. At the same time, this trend will create trade-offs between production of IT and TV panels.”

Gen 5 fabs dominate production of mini-note/slate PC panels, including 10.1” mini-note and 9.7” iPad panels, and 89 percent of notebook PC panels are made in Gen 5 fabs, from 11.6”W to 18.4”W. Gens 5–7 are currently the main fabs producing monitor panels, while 50% of TV panels are made in Gen 6 or Gen 7 fabs.

Table 1: Q3’10 Large-Area TFT LCD Production Share by Fab Generation (Units)Source: DisplaySearch Quarterly Large-Area Production Strategy Report.

Another way to look at production strategy is by glass substrate input for each application.

In area terms, panel makers allocated 5 percent of Gen 5, 25 percent of Gen 5.5, 65 percent of Gen 6, 78 percent of Gen 7, 97 percent of Gen 8 and 100 percent of Gen 10 for TV panel production.

Table 2: Q3’10 Glass Substrate Input Mix for Each Fab Generation (Area)Source: DisplaySearch Quarterly Large-Area Production Strategy Report.

Other key findings from the report include:

* TFT LCD production inputs were 34.1 million square meters in Q3’10, a 10 percent decline from Q2, due to reduced capacity utilization. In Q4’10, panel makers are targeting 38.5 million square meters input, as they gradually increase utilization.

* In unit terms, Korea dominated panel production with 52 percent share in Q3’10, up from 47 percent in Q2’10. Taiwan accounted for 38 percent in Q3’10, down from 42 percent in Q2’10. Japan had 6 percent and China 4 percent in Q3’10. The shares are expected to hold in Q4’10.

* In Q3’10, LG Display dominated input area with 27 percent, followed by Samsung at 24 percent, Chimei Innolux at 16 percent, AUO at 14 percent, and Sharp at 8 percent. Based on panel makers’ current production plans, the shares will be similar in Q4’10.

* For LCD monitor panel production, area inputs in Q4’10 will be dominated by LG Display with 27 percent, Chimei Innolux (26 percent), Samsung (18 percent), and AUO (15 percent).

* LG Display is producing 9.7” slate PC panels on Gen 3.5 and 5, while Chimei Innolux and Samsung are using Gen 5. LG Display plans to produce 9.7” panels on a Gen 6 line starting in 2011.

* In Q3’10, accounting for capacity utilization, Gen 8 led in glass substrate input area, accounting for 27 percent of global capacity, followed by Gen 7 with 23 percent, Gen 6 with 20 percent, and Gen 5 with 19 percent. Gen 5.5 accounted for merely 2 percent of input area and Gen 10 for 4 percent.