Thursday, July 14, 2011

Penetration of slim products such as tablet PCs into our livelihoods will power huge growth of demand for slim glass

TAIWAN: According to the observation on slim products by the research institution WitsView under TrendForce, along with the hot sales of Tablet PCs and mid-to-small size products, thinner and lighter product design has gradually become the mainstream driving to the demand for slim panels.

Due to the limitation of panel production equipment in the past, glass substrate makers have been reluctant to increase product complexity which could cause the loss of production capacity. Therefore, the thicknesses of glass substrates are fixed among production lines of all generations.

WitsView indicated that the mainstream thickness of traditional glass substrate in Gen5 panel production line is 0.5 mm. However, along with the rising demand for Tablet PCs and the transfer of certain mid-to-small size products to the Gen5 production line, the demand for 0.3 mm or even 0.2 mm slim glass has been surging.

Traditionally panel makers will reduce the thickness of 0.5 mm glass substrate and color filter to 0.3 mm or 0.2 mm with chemical etching method. However, in light of significantly increased demand, limited production capacity, and greatly increased overall cost of chemical etchings, panel makers are considering making related products directly on 0.3 mm glass substrates.

Considering the high cost of equipment modification for 0.3 mm and the low yield, the short-term plan for panel maker is to make 0.4 mm glass substrate the mainstream thickness for Gen5 production line and to lower overall production cost through reduction of time required for substrate thinning to 0.3 mm.

In terms of the supply side of glass substrate, WitsView thinks along with the diversified panel demands for associated glass substrates such as TFT substrate, LTPS substrate and cover glass, glass makers have modified their previous stubborn attitudes towards glass thickness specifications with the hope that through production of slim glass, the production volume can be increased without increasing capital expenditure for new glass furnaces.

By enhancing the production scale and capacity of slim glass, it is hopeful that the price of slim glass can get closer to existing product in order to stimulate the continuous growing demands from panel makers for slim glass.

WitsView points out that with the gradual maturation of existing panel products, the rising demand for slim product has become the recent highlight. Both the supply side and demand side of glass substrate have been developing along this direction based on the considerations of cost, production scale and price strategy. Therefore we can foresee that the conversion to slim glass becomes the major revolution for panel production process within one or two years.

WitsView has predicted that the proportion above Gen5 production line converted for the production of slim glass could reach roughly 25 percent this year. The number for Gen6 production could reach 30~35% due to the early introduction of 0.5 mm glass substrates back in 2010.

Along with the gradual conversion of Gen5 production line to the production of 0.4 mm glass substrate in the second half of the year, the overall annual conversion ratio could reach 20 percent with prospect of moving to 0.3 mm glass substrate in the future. The conversion ratio of Gen7 and Gen8 production line to the production of 0.5 mm glass substrate this year is predicted to be lower than 5 percent due to the low yield of large-sized substrate production.

2011-2012 slim glass substrate conversion schedule of panel makersSource: WitsView, Taiwan

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