Taiwan panel makers less concerned about Sony-Sharp cooperation

Taiwan TFT-LCD panel makers do not feel as threatened as they were by the cooperation between Japan-based Sony and Sharp on 10G production, according to market sources.

Sony and Sharp in February 2008 agreed to form a joint venture for 10G LCD production. Sony earlier this week was said to have agreed to take a 10%s take in a Sharp LCD unit, with the possibility of raising the holding to 34 percent in the future.

Taiwan's makers were much concerned about the impact of the Sony-Sharp partnership when it was announced last year, as they were - and still are - major clients for Taiwan's panel industry. But in response to the latest development, the Taiwan makers think the two Japan vendors will probably not start extensive expansion plans anytime soon because they have suffered significant losses due to the global economic downturn, the sources said.

Taiwan panel makers' growing confidence is also supported by the fact they are establishing a firm base in China TV vendors' supply chain, allowing to be less dependent on first-tier vendors in Japan and Korea, the sources said.

Sony has reported loss of 98.9 billion yen (US$1.04 billion) for the 2008 fiscal year ended in March 2009, and has guided losses of 110-120 billion yen for fiscal 2009. Sharp lost 125.8 billion yen for fiscal 2008.

The Sharp-Sony 10G plant is located in Sakai Osaka, Japan, and is scheduled to start operation in October 2009, with initial monthly capacity of 36,000 glass substrates (2880mm×3130mm) and maximum capacity of 72,000 glass substrates. The 10G plant will mainly produce 40-, 50-, and 60-inch LCD TV panels.