1. Japan’s panel surface has become desolate, but behind it is powerful to the point of being “appalling”, often accounting for half of the global market share. Recognizing the current state of its component materials has multiple significances. After much thought, I decided to publish this article.
2. Smaller, more precise, and more accurate is their direction of attack; being low-key, monopolistic, highly profitable, and hidden in the upstream of the industry where it is not easy for everyone to notice is their prominent feature.
3. The Japanese electronic empire is composed of “four defensive lines”: the first line is consumer electronics; the second line is the IC and passive component industry; the third line is precision equipment manufacturing; the fourth line is the core industry related to materials. Today we will discuss the first two lines.
Japan’s display screens are declining. Sharp was acquired by Foxconn, and Japan Display reported a financial crisis this year, but it occupies an unshakeable position in upstream material supply, such as Dai Nippon Printing, Canon, Aifake, Sumitomo, and Nitto.
When we thought that Samsung’s technological strength was formidable enough to lead the entire mobile screen industry, we did not expect that this world-class display giant also has a side that is constrained by others. It is understood that Samsung Display uses a mask called Fine Metal Mask during the process of depositing OLED organic materials on the screen substrate when producing AMOLED screens. It is through this mask that tiny OLED subpixels can be precisely and accurately deposited on the substrate.
This high-precision metal mask must maintain a very low thermal expansion coefficient during high-temperature operations to prevent deviations in the deposition of melted OLED materials due to high temperatures. The metal mask used by Samsung in the production of AMOLED is provided by Japan’s DNP (Dai Nippon Printing), and it is said that until the end of 2018, all of DNP’s Fine Metal Mask production capacity was reserved by Samsung. If DNP experiences supply shortages, Samsung’s AMOLED production capacity will also be affected.
Global TFT-LCD substrates account for 50%·····
From the current LCD panel industry, whether it is TFT-LCD or AMOLED, substrate glass is an important material required for production. Depending on the display technology, device structure, and application scenarios, single-layer or multi-layer glass may be additionally required. Therefore, substrate glass is an important component of liquid crystal display devices and one of the key basic materials of the LCD display industry, accounting for about 4% of the production cost of liquid crystal display devices. In this 4% market space, Japan’s Asahi and NEG each occupied 25% and 21% respectively, while Japan’s NHT occupied 4%, and Corning occupied 50%, with domestic manufacturers having no market at all.
Although local substrate glass manufacturers have accumulated over the years, the main ones are Rainbow Group, Tongxu Photoelectric, and China National Building Material, but they are all producing in G4.5-G6, while domestic LCD investments are all in 8.5 and 10.5 generation lines. In contrast, foreign companies like Asahi and Corning are mainly in G8.5 lines and above.
The only noteworthy development is that in May 2017, Rainbow Group and Corning USA cooperated to build an 8.6 generation LCD substrate glass processing production line in Xianyang and Chengdu, respectively. Meanwhile, Tongxu Photoelectric and Japan’s NEG built an 8.5 generation flat panel display substrate glass processing plant in Fuzhou, which successfully produced the first batch of 8.5 generation glass substrates in May 2017 and sent them for mass certification to BOE. Although the current focus is on backend processing, this breakthrough will undoubtedly provide effective technical reserves for later opening up the entire industrial chain.
$14 billion polarizer market occupies more than half·····
Currently, the global polarizer market is mainly monopolized by Japanese, Korean, and Taiwanese enterprises. The main raw materials for polarizers, TAC film and PVA film, are firmly controlled by Japanese companies.
AC film: Japan’s Fuji accounts for 59%, KONICA about 21%
PVA film: Japan’s Kuraray occupies more than 70%.
Three Japanese companies account for over 50% of polarizer production capacity.
The following are the major global polarizer manufacturers:
Nitto
Nitto Denko Corporation, established in October 1918, is one of the Fortune Global 500 companies, headquartered in Osaka, Japan. It is the largest and most innovative listed company in Japan’s chemical field. Since entering the Chinese market in 1979, it has established 27 production and sales companies in Hong Kong, Shanghai, Beijing, Tianjin, Xiamen, and Shenzhen. It began producing and selling polarizers in 1975. Currently, it has 14 production lines with an annual production capacity of 110 million square meters.
Sumitomo
Sumitomo Chemical Co., Ltd., founded in September 1913, has 167 subsidiaries and approximately 31,000 employees worldwide. It mainly engages in the chemical and energy industries and began producing and selling polarizers in 1988. Currently, it has 13 production lines with an annual production capacity of 87 million square meters.
Sanli Chemical
Sanli Chemical Co., Ltd. is a high-tech chemical enterprise that integrates R&D, production, and sales. It is the world’s first company to produce polarizers, having started production and sales in 1963. Currently, it has 7 production lines with an annual production capacity of 30 million square meters. Due to financial issues, there are no plans for capacity expansion in recent years.
LG Chem
LG Chem is one of the three major groups in South Korea, LG Group, and is one of its most important pillar industries. Since its establishment in 1947, LG Chem has grown to become the largest comprehensive chemical company in Korea, leading the Korean chemical industry through continuous innovation and research and development activities. It has 10 production lines with an annual production capacity of 75 million square meters. It has a factory in Nanjing – LG Chem (Nanjing) Information Electronic Materials Co., Ltd. A new 2300mm production line is expected to start production in the first half of 2016, adding an additional capacity of 24 million square meters.
Samsung SDI
Samsung SDI is a subsidiary of the Samsung Group in the electronics field. Originally referring to the CRT production department of Samsung China, it later transitioned to producing lithium batteries, polarizers, and other products due to the shift to LCD technology. Samsung SDI entered the polarizer market after acquiring ACE DIGITECH in 2007. In 2013, it became the first in the world to successfully develop a technology that uses PET film with excellent optical performance to replace TAC film as polarizer material, successfully applying it to TV products.
Currently, it has 4 production lines with an annual production capacity of 32 million square meters. In 2015, it invested $180 million to establish a polarizer production line in Wuxi, which is expected to start production at the end of 2016, adding an estimated annual capacity of 30-40 million square meters.
Chimei Materials
Chimei Materials was founded in 2005 by Chimei Industrial Investment, primarily producing polarizers for LCDs. It has 4 production lines with an annual production capacity of 25 million square meters. In 2014, it established 2 production lines in Kunshan, and in September 2015, it cooperated with Jinjiang Group to accelerate its production speed, expecting to add an annual capacity of 12 million square meters.
Lite-On Optoelectronics
Lite-On Optoelectronics Technology Co., Ltd. was established in March 1987 and introduced polarizer technology from Japan’s Sanli. It is the first company in Taiwan to have the manufacturing and processing capabilities of polarizers. Currently, it has 9 production lines with an annual production capacity of 40 million square meters.
BenQ Materials
BenQ Materials Co., Ltd. (formerly Daxin) is part of the BenQ Group, established in 1998. It quickly entered the polarizer market due to its expertise in optoelectronic materials and rapid mass production capabilities, becoming an important part of the BenQ Group’s core development strategy centered on LCDs. Currently, it has 4 production lines with an annual production capacity of 30 million square meters.
Sanli Pu
Shenzhen Sanli Pu Optoelectronics Technology Co., Ltd. was established in 2007, mainly engaged in the R&D, production, and sales of polarizers. In 2011, it completed the construction of a wide-format production line for TVs and computer LCD screens. Currently, it has 3 production lines with an annual production capacity of 6 million square meters. In 2014, it invested 2 billion in Hefei to build 3 wide-format TFT polarizer lines, which are expected to start production in 2018, bringing total annual capacity to 35 million square meters.
Shengbo Optoelectronics
Shengbo Optoelectronics is a subsidiary of Shenzhen Textile Group, founded in 1995, and is the first professional manufacturer of polarizers in China, covering a wide range of products including TN, STN, CSTN, TFT, and polarizing glasses. In 2010, it began producing narrow-format polarizers for mobile phones and tablets, and in 2012, it achieved trial production of wide-format polarizers.
Currently, it has 2 production lines with an annual output of 8 million square meters. Ongoing projects include the “Phase II of TFT-LCD polarizer”, which consists of 2 wide-format production lines with an expected capacity of 13 million square meters annually. Originally planned to cooperate with Nitto, the execution failed, and the project is currently stalled.
In addition to Sanli Pu and Shengbo Optoelectronics, there are many other companies in China engaged in the polarizer industry, such as Wenzhou Qiaoye, Foshan Weida, and Shenghua Technology, but they have not made achievements in polarizers used in TFT-LCDs.
ACF anisotropic conductive film over 70%·····
Source: Market research data from 2015 (Zhongjun Co., Ltd.)
Famous ACF manufacturers at home and abroad
Sony ACF
Sony developed an advanced ACF technology called Microconnector, used in COF and COG connections. This ACF material mainly has breakthrough developments in the manufacturing of conductive particles, which not only block metal on the surface of the plastic core as usual but also coat a 10nm thick insulating layer on the surface of the metal layer, and this insulating layer is composed of extremely fine resin particles.
Hitachi Chemical Corporation
Company Profile: Hitachi-Chem was established in October 1962, headquartered in Tokyo, Japan, mainly engaged in business including functional materials (electronic materials, inorganic materials, resin materials, etc.) and advanced components and systems.
ACF: In response to the requirements for fine spacing, Hitachi Chemical proposed a double-layer structure ACF, where the upper layer is a resin layer without added conductive particles, while the lower layer contains a single layer of conductive particles. Compared to traditional ACF, the double-layer structure allows for a higher particle density in the unit contact area of the electrode without increasing the density of conductive particles, while the local particle density is lower near the chip bump area, reducing the occurrence of short circuits. For adhesive resin, considering future reliability, Hitachi Chemical chooses to use epoxy resin systems in its products to improve adhesion strength, glass transition temperature, and moisture resistance.
Dexerials Corporation
Company Profile: Dexerials Corporation was established in June 2012, headquartered in Tokyo, mainly engaged in the manufacturing and sales of electronic components, connection materials, optical materials, etc. As of March 2017, global sales reached 62.598 billion yen.
Main products: ACF, optical elastic resin (SVR), optical related films, etc.
3M
Company Profile: 3M Company (Minnesota Mining and Manufacturing) was founded in 1902, headquartered in St. Paul, Minnesota, USA, and is a world-famous diversified multinational enterprise, with its business covering a wide range from household products to medical supplies, from transportation, construction to commercial, education, and electronics, communications, and other fields.
Main electronic products: ACF, battery materials, chemical products, circuits, embedded capacitors, etc.
TeamChem
TeamChem was founded in 2001 by Dr. Yeh Sheng-Wei, a Taiwanese scholar who studied in the United States. The management and R&D team consists of professionals who have worked for high-tech companies such as 3M, Formosa Plastics, Hon Hai, Yageo, Asus, and Shuo Ying Machinery, dedicated to developing environmentally friendly materials, providing flexible PCBs, flexible circuits, flexible electronic paper, flexible wiring, flexible copper foil substrates, etc. In recent years, it has developed flexible quick-drying heat-dissipating inks, which can be applied to flexible circuit boards, laptop keyboards, EMI shielding flexible boards, and the 2011 ACF anisotropic conductive film, which is used in touch screens, RFID wireless electronic tags, and other products.
U-PAK Technology
Company Profile: U-PAK Technology Co., Ltd. was founded in 1995 and is a professional R&D, production, and sales enterprise for conductive materials, marketing globally under its self-created U-PAK brand, and is the first manufacturer in Greater China to mass-produce ACF.
Main products: ACF, conductive sheets, electronic component carriers, cover tapes, etc.
Shenzhen Feisier
Company Profile: Shenzhen Feisier was founded in 1999 and is one of the first national high-tech enterprises in Shenzhen, with four research laboratories for polymer materials, photopolymerization materials, cleaning technology, and analytical testing, focusing on the R&D of new materials for LCDs, CTP, and other flat panel displays.
Main products: Anisotropic conductive film (ACF), environmentally friendly cleaning agents, CTP-specific optical adhesives, etc.
OCA optical adhesive: Mitsubishi alone occupies over 50% of the global market share, plus Hitachi, Nitto, and Oji Paper, expected to exceed 60%.
According to research data from relevant institutions, the global OCA optical adhesive market size was approximately $810 million (about 5.35 billion RMB) in 2016, and it is expected to approach $900 million (about 5.75 billion RMB) in 2017. With the popularization of new applications in automotive electronics, intelligent manufacturing, and smart homes, the demand for OCA optical adhesives will enter a rapid growth channel, expected to reach nearly $1.05 billion by 2020.
Japan is also the largest market in this area. It is said that Mitsubishi alone occupies over 50% of the global market share, combined with Hitachi, Nitto, and Oji Paper, expected to exceed 60%. Of course, there is also 3M, which is one of the market giants in OCA, leaving very little market share for domestic companies.
Seeing this opportunity, domestic tape companies have increased their R&D efforts on OCA optical adhesives, and after years of effort, their technical levels have gradually improved.
Equipment
Taking OLED as an example, Canon Tokki almost monopolizes the OLED production equipment market. This company closely cooperates with Samsung Display. Of the seven machines manufactured this year, five were ordered by Samsung, while LGD and Chinese panel maker BOE only managed to secure one each. The exposure machines are monopolized by Japan’s Canon and Nikon.
In desperation, LGD had to turn to the Korean company Sunic System to create OLED production equipment. However, both companies are producing OLED for the first time, and it is rumored that Apple is not reassured and insists on using Canon Tokki equipment. Therefore, Canon Tokki instruments will be used to fulfill Apple’s order, while Sunic System equipment may be supplied to Chinese manufacturers.
In addition to these, there are many critical details that we can ask everyone to supplement.
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