China to overtake Japan in TFT LCD panel production

China is poised to overtake Japan in large-area TFT LCD panel production, according to the latest figures from DisplaySearch.

to production to push Chinese production ahead in the second quarter of 2011.

Large-area TFT LCD panel production by Chinese makers was 3.3 million units per month in the first quarter of 2011, which is similar to the reported units per month from Japanese makers. However, China will increase to 4.1 million units in the second quarter, while Japan is expected to fall to 2.3 million units. China is also expected to be higher than Japan in unit production from the third quarter of 2011 to the first quarter of 2012.

“Korean makers continue to be the leader in large-area TFT LCD production, accounting for approximately half of global output, followed by Taiwanese makers, which account for about 40%,” noted Shawn Lee, senior analyst for DisplaySearch. “However, the likelihood that China will pass Japan may indicate the beginning of a phase in which China plays a more important role in the global flat panel display industry.”

DisplaySearch points out that, on an area basis, Japan will remain larger than China for some time, as there are higher generation fabs, including Gen 6, Gen 8 and Gen 10, in Japan. However, Chinese companies like BOE, ChinaStar, and CEC-Panda will be ramping up Gen 6 and Gen 8 fabs within the year, and there will be more expansions in 2012. The push by Chinese panel makers may influence the supply/demand balance, panel prices, panel roadmaps and value chain relationships. Meanwhile, Japanese manufacturers are starting to look for alternative options to sustain their TFT LCD businesses, such as outsourcing, technology licensing, shifting to small medium size businesses, as well as joint ventures, mergers, and consolidations.