The PGM240828A-NS(C)-BBS from Xiamen Precise, mainland China, is a 5in monochrome display with a 240x128-pixel resolution

The Greater China region is a manufacturing hub for all types of LCD modules, including alphanumeric, graphic and dot-matrix. Thin-film transistor (or TFT) remains the dominant type of LCD module offered in the region, although other types, such as FS, TN, STN, CSTN, FSTN, are available as well.

Taiwan, specifically, is home to the largest LCD module makers in Greater China. Some of the major companies include AU Optronics Corp. (AUO), Chi Mei Optoelectronics Corp. (CMO), Chuanghwa Picture Tubes Ltd, HannStar Display Corp., Innolux Display Corp. and Quanta Computer Inc. Taiwan's FPD industry is mainly driven by large-area TFT LCD products, such as monitors, laptops and TVs.

According to DisplaySearch, shipments of TFT LCDs from Taiwan accounted for more than 50 percent of worldwide shipments in 2006. In 2007, major Taiwan suppliers are expected to continue supplying more than half of global shipments.

Similarly, TFT is the major display type among Hong Kong LCD manufacturers. Some makers that formerly concentrated on small-screen TFT panel production are set to start production of larger panel sizes.

Hong Kong manufacturers were previously more focused on midrange monochrome displays such as TN, STN, HSTN and FSTN LCD modules for industrial and consumer electronics. They had planned to place more emphasis on color displays in late 2006, a plan that was more likely to begin with CSTN. Though makers had been offering smaller TFT LCD modules, higher production costs prevented TFT LCD from permeating the market for low-end to midrange color displays, which was ruled by CSTN. However, the price gap between CSTN and TFT has since narrowed.

Mainland China makers, on the other hand, are less focused on large-area applications and more on small-screen applications. There are about 200 makers in mainland China engaged in LCD module production.

An LCD module consists of a PCB that has an LCD panel mounted on it, a power supply and a controller LSI to drive the display. It may also have a backlight. About 70 percent of large- and mid-scale suppliers produce their LCD panels in-house.

While most makers have started to develop other types of active-matrix and passive-matrix displays, R&D still revolves around TFT and the development of large-area displays. Low power consumption and better color saturation are primary R&D objectives. SMT, COB, COG and TAB are the common mounting technologies used in production.

TFT LCDs still account for the major share of the worldwide FPD industry. In 2006, TFT LCDs took 83 percent of the worldwide FPD output, with a production value of
$69.4 billion, according to DisplaySearch. Production value is expected to move further up to $73.7 billion in 2007, $78.7 billion in 2008, $82.2 billion in 2009 and $84 billion in 2010.
Vertical integration, strategic alliance
Hot applications: Digital photo frames, mobile phones
High quality, cost-effective displays top R&D agenda
Healthy market bolsters production
OEM, ODM output increasing, prices mixed

Taiwan and Hong Kong makers conduct the bulk of their production in mainland China, where labor and overhead costs are generally lower. R&D, however, is usually conducted in their respective headquarters. For cost reduction, vertical integration remains one of the solutions. For raw material sourcing, strategic alliances with suppliers work well with manufacturers.
Wintek Corp. has eight factories in
Taichung, Taiwan and two in Dongguan, Guangdong province and Jiangsu province in mainland China. With about 7,000 production workers and 117,594sqm production area, the company's Jiangsu factory mainly does the assembly of CSTN and MSTN LCD modules, as well as the front- and back-end production of LCD panels and color filters.

Wintek's 79,100sqm factory in Dongguan has 5,500 production workers. The factory is mainly used for LCD module assembly and back-end production of LCD panels. One of its factories located at the Taichung Industrial Park is for the front-end production of TFT LCD panels. The rest of Wintek's Taichung factories are running LCD tooling, front- and back-end production of LCD panels, ITO glass and color filters production, and LCD module and touch panel assembly.

Truly Semiconductors Ltd specializes in producing both the panel glass and driver units for its LCD modules. Truly Semiconductors accounts for 95 percent of its parent company Truly International Holdings Ltd's annual revenue.

Truly Semiconductors has vertically integrated its production of glass panels, touchscreen panels, PCBs, plastic parts, bezels, display modules and complementary LCD components. LCD modules, COG modules and LCD panels account for 39 percent,
35 percent and 26 percent, respectively, of the company's annual revenue.

Truly Semiconductors has its own panel factories for TN, HTN, STN, CSTN, FSTN, touchscreen and color TFT LCDs. It also produces its own OLED panels. The company's TFT LCD production was formerly limited to cutting and repackaging TFT mother glass substrates, which it sourced from other suppliers. This changed in May 2007 when it opened its own 2G TFT glass panel production lines. The facility began pilot production a month later.

Truly Semiconductors also has two module factories that develop COB, COF, COG, SMT, FPC and TAB modules.

Acemi Technology Corp. Ltd specializes in the design and production of TFT LCD driver boards but sources ready-made panels from Taiwan suppliers, such as AUO, Data Image and Prime View. The ICs in its driver boards are from South Korea and Japan. Acemi's clients include manufacturers of MP3 players, MP4 players, portable media players, portable DVD players and door phones.

Bona Fide Technology Ltd produces its own TFT LCD panelsusing substrates sourced from South Korea and Taiwan suppliers. The company reports that most of its customers prefer panels made from South Korea substrate, although these cost a little more than Taiwan-made substrate. A 1.1in TFT LCD panel made with South Korea substrate costs about 10 percent more than a model made with Taiwan substrate. The difference climbs up to 20 percent for a 7in substrate.

TFT, along with STN and FSTN, dominate Bona Fide's LCD module sales. Most of the company's LCD modules are supplied to the telecom and consumer electronics markets in products such as mobile phones and MP4 players.
Eighty-five percent of AUO's LCD module production is done in its mainland China factories in Suzhou, Jiangsu and Songjiang, Shanghai. The company recently constructed a new facility in Xiamen, Fujian that began operations in Q2 2007.

AUO also has LCD module facilities in Taoyuan and Taichung in Taiwan. The company has acquired ISO 14064-1 certification in its seven sites and fabs in Taiwan and on the mainland. AUO has formed strategic alliances with Radium and Orise for driver ICs, Wellypower for CCFLs, Daxon for polarizers and Darwin for backlight units.

In-house production of CMO includes color filters and backlight units. Strategic alliances include Himax for driver ICs, GIO for CCFLs and CMT for polarizers.

Makers are also tapping the market for portable electronics with larger displays, such as GPS devices. TVs are likewise a leading application for flat panel modules. For TFT LCD modules, however, mobile phones are the number one application, followed by desktop monitors, laptops and digital still cameras.
Bona Fide is looking at the digital photo frame sector as a major target market for 3.5in to 7in color TFT LCD modules. It is targeting initial monthly production capacity of 30,000 to 50,000 units in Q3 2007, once its new production lines for these LCD module sizes are operational.

Bona Fide offers entire digital photo frame modules which consist of the TFT LCD panel plus the driver board. The driver board includes basic digital photo frame functions such as the card reader and video input. Although Bona Fide is mainly a display module maker, it has a partner manufacturer that assists in the production of these modules.

Truly Semiconductors also anticipates a huge market in LCD modules for digital photo frames. However, since this is a new market, the company's production for this sector is not very significant. It has so far designed a range of TFT LCD modules with 7in, 5.7in, 4in and smaller panels for this application.

Acemi's expertise in control board design has given it an edge in the digital photo frame market. It recently released a series of 5.6in to 15in full-color LCD modules with controller boards especially designed for this application.

One of Acemi's models features an LCD panel with 8.4in screen, supporting 800x600 SVGA resolution, 500:1 contrast ratio, 250cd/m2
brightness and CCFL backlight. Acemi expects TFT LCD modules for the digital photo frame market to account for up to 30 percent of sales.

Apart from the digital photo frame market, Acemi provides TFT LCD modules for handheld electronics. These modules feature 1.5in to 8in panels. The company also provides LCD modules for the LCD TV and monitor markets.

Wintek considers the mobile phone segment to be its biggest market, accounting for 80 percent of its total sales. The rest come from PDAs, office automation equipment, medical devices, industrial instruments and automotive products such as in-car TVs. Wintek is one of the leading TFT LCD makers in Taiwan for small- and mid-sized displays.

TFT displays are 14in, or bigger Of all LCD display types, suppliers are more focused on the TFT segment. Taiwan makers are more concentrated on the development of 14in-and-above TFT LCD modules. However, bigger displays are also being produced. TFT LCD monitors in 17in and 19in are being replaced by 19in and 22in displays, respectively. In the TV segment, the 9in displays are slowly being phased out by 32in and 37in displays. AUO has responded to the trend and begun producing 6G 20in TFT LCD modules.

Bona Fide started producing color TFT LCDs in 2005. It began with 1.1in to 3.5in modules. The company is planning to launch 4.3in to 7in models by Q3 2007. It aims to tap the GPS market with 4.3in panels, while it expects the digital photo frame sector to be its main market for the 7in panels.

Bona Fide was formerly focused on TN, HTN, STN and FSTN LCD modules in TAB, COB and COG bonding technologies. By shifting its focus to color displays, the next logical step for the company would have been CSTN production, given its experience in TN technology. However, the company decided to focus more on its TFT LCD business, and invested in manufacturing facilities to produce modules with larger panels.

Bona Fide reveals that the price difference between TFT and CSTN has become almost negligible, making TFT a highly viable alternative in all applications formerly dominated by CSTN.

Truly Semiconductors' LCD modules include TN, HTN, STN, CSTN, FSTN, touchscreen and color TFT LCDs. Despite the comprehensive display technologies across its product catalogue, Truly Semiconductors reports that its TFT LCD models are now its standout products, owing to the boom in small- and medium-sized portable electronics. The company also sees good prospects for TFT LCD modules in the portable entertainment sector. It can provide EL, LED, CCFL backlighting for all of its panels.

	Truly Semiconductors, Hong Kong, has 2in ti 7in 262,000-color TFT LCD modules fro portable entertainment devices

Makers' product development agendas are focused on high reliability, wider operating temperature, high contrast ratio, low power consumption, better color saturation and multifunction design.

Shenzhen Santech Display Co. Ltd is among the companies that can offer FS and polymer-dispersed (PD) LCD modules. The company has patented its FS LCD, which adopts RGB backlights to display hues instead of color filters. As a result, the modules have a crisp coloration quality similar to TFT LCD modules but cost one-third less.

FS LCD modules are widely used in instruments, home appliances, game machines and information displays, among others. Santech develops new products based on buyers' custom specifications.

Fordata Electronic Co. Ltd's character and graphics LCD models, made with COB bonding, are among its popular models. Most of Fordata's products have low 3V voltage. The company plans to release more new models with low voltage and value-added performance designed according to customers' requirements. The company will start to use COG technology for its LCD modules.

Dalian Eastern Display Co. Ltd's R&D effort is to develop more LCD modules for automotive applications. Xiamen Precise Display Co. Ltd, on the other hand, puts more emphasis on COG TFT LCD modules.

Truly Semiconductors focuses its R&D on low power consumption and better color saturation. The company achieves this by improving backlight design, optical and plastic molding technique, driver IC methodology, LED efficiency and better color filter design.

Bona Fide has been working with Hong Kong's University of Science and Technology since 2000. The arrangement has enabled the company to develop proprietary technologies such as the AVA, MIRA and KALA display technologies.

Output and sales are projected to increase by 10 percent to 30 percent. Some makers with more positive view of the market project production and sales increases of more than 50 percent. Fordata, for instance, targets a 60-percent increase in LCD module sales
in 2007.

Capacity utilizations range from 70 percent to 100 percent. Manufacturers that are fully utilizing their capacities plan to set up more production lines to accommodate additional orders.

Dalian Eastern plans to import more COG production lines in H2 2007 to expand capacity primarily targeted at automotive applications. The company aims to achieve a monthly capacity of 500,000 LCD modules for automotive products. Overall, it has a capacity of 1.01 million LCD modules and actual monthly output of 1 million.

Fordata recently doubled its capacity for COB-type LCD modules to 200,000 units. The company is building a new factory in Xiamen for LCD module production using COG and TAB technologies. LCD panel production will also be conducted in the new factory, which is expected to be operational by early 2008.

Fordata has an overall capacity of 350,000 LCD modules with a utilization rate of
70 percent. Fifty-five percent of its output is dot-matrix LCD modules, 35 percent are graphics LCD modules and 15 percent are alphanumeric.

Santech has a monthly capacity of 2 million LCD modules and panels. It offers LCD modules using COB, COG or TAB technologies.

Manufacturers in Greater China ship more than 50 percent of their output. Fordata exports all of its LCD modules, while Dalian Eastern and Santech ship about 70 percent of their output. All makers accept OEM and ODM projects, which in fact rake in more than 60 percent of their total revenues. Own-brand products also take up a significant share of production. CMO, for example, produces LCD modules for clients and for use in own-brand products.

According to Bona Fide, yield rate is not a factor that significantly contributes to the cost problem in TFT LCD module production. The most pressing concerns are raw material and labor cost.

Prices of LCD modules are also affected by a number of factors including mounting technology, viewing angle, size of LCD, operation voltage, contrast ratio, response time, function and other custom specifications. For example, the price of some graphics LCD modules with 240x128-pixel resolution and 5in monochrome display is about $23 each. A 16x2-character LCD module made with COB is about $3.

LCD TV modules are more expensive, priced at an average of $413 per unit in 2006. Price, however, declined in 2007 to $311 each. Prices of 32in LCD TV modules, on the other hand, are expected to increase for the rest of 2007.

On the whole, prices are likely to remain stable in 2007. Although raw material cost is rising, severe competition compels makers to maintain their current pricing or lower prices by 5 percent to 10 percent for the old models.

For some suppliers such as Truly Semiconductors, TFT LCD module prices are likely to go up in 2007. Panel, processing material and equipment costs are the company's main cost concerns in TFT LCD panel production.

To maintain profit margins, most makers resort to sourcing raw materials from local suppliers, strive for more volume orders and introduce more new products.

Delivery lead time is generally one week to five weeks after confirmation of orders. Minimum order required is usually 500 units.