| Mar. 25, 2005 |
Toray to Expand Production of LCD Color Filters |
| Toray Industries, Inc. today announced that
the company will expand the production capacity for high-performance color filters
used in small and mid-sized liquid crystal displays (LCDs). In response to the
changing business environment, the expansion will take place in three steps at
its Shiga Plant (Otsu, Shiga prefecture). In the first phase of the expansion,
the company plans to construct a new building that would house the series of
additional facilities and increase the production capacity for the third-generation
glass size (550mm x 670mm substrate) by 15,000 sheets per month, by spending
about 3 billion yen. The newly added facilities will start its operations from
April 2005. The market for small and mid-sized LCDs is expected to continue expanding in the future, led by its application in mobile phones as well as its use in digital cameras, handheld gaming units, car navigation systems, etc. Specifically, in the LCD market for color-displays in mobile phones, which the company considers as the most important application, the worldwide sales volume has exceeded 400 million units in 2004 and color-displays are believed to account for more than 70% of the display units in mobile phones. Also, close to 90% of the mobile phones are expected to have color-displays by 2008, with the total number of such mobile phones estimated to reach 600 million units. As the functions and services provided through mobile phones become more and more sophisticated, the demand for thin film transistor (TFT) LCDs, which are superior in brightness and in response time for displaying movies, is expected to grow strongly while that for super twisted nematic (STN) LCDs is expected to remain flat or start to decline gradually. Currently the LCD panels for mobile phone color-displays are supplied using production facilities that handle up to the fourth-generation size (730mm x 920mm substrate) due to the technological limitations on fineness and thinness. Given such market trends, the supply-demand situation of TFT arrays and color filters shows a shortage in the supply of color filters. In terms of the facilities for the different generations, there is a significant short supply for the color filters of the third-generation size (550mm x 670mm substrate) in particular. While manufacturers have been rapidly expanding the production capacities for fifth generation (1m*1m substrate) or larger sizes used in larger applications such as LCD TV sets, the shortage for color filters for small and mid-sized LCDs is expected to continue for the foreseeable future due to the smaller investments being made by manufacturers. Since 2002, Toray has been working on the structural reform of its color filter business by shifting to the small and mid-sized applications from the larger applications. In the course of this reform, the company became the first in the industry to succeed in developing a high definition, high visibility, trans-reflective color filter(*2) suited for low-temperature polysilicon LCDs by using polyimide resin(*1) in color paste and black matrix (BM). The trans-reflective color filter offers clear and bright display both indoors and outdoors, and the innovation was achieved by improving Toray's existing polyimide specific technologies. With the expertise it had gained in wide viewing angle technology through its production of color filters for large-sized LCDs as a base, Toray has been stepping up its efforts by collaborating with Toshiba Matsushita Display Technology Co., Ltd., a prominent manufacturer of small and mid-sized LCDs, and the Seiko Corporation group companies. Furthermore, the company's collaboration with the world's biggest LCD maker Samsung Group (Samsung Electronics Co. Ltd. and Samsung SDI Co., Ltd.) for small and mid-sized applications has been progressing smoothly since the companies signed the agreement last year and Toray's output volume for the Samsung group companies has been rapidly expanding. As a result of such efforts, the company became the biggest supplier of color filters for color-display mobile phones with a global market share of about 20% and the profitability of its LCD color filter business also has been improving. In addition to the demands from major LCD manufacturers, the company has also been receiving requests for value added color filters with functions that require additional processing, and the company is currently unable to meet the volume requirements of customers. Buoyed by the rapid shift to color-display mobile phones, the market for small and mid-sized LCDs is estimated to grow about 40% from 2005 to 2008. Under such circumstances, Toray decided to expand the production capacity for its color filter business, thereby shifting to the growth strategy. In the second phase of expansion, the company is planning to increase the production capacity to 30,000 sheets per month from 15,000 sheets, at the same site. The details of the third phase of expansion, including the size of the facility and production volume planned within the same building, will be determined after careful assessments of the changes in the business environment. Under its mid-term management objective “Project NT-II,” Toray has been promoting its offensive management projects of “Expansion of Advanced Materials Businesses,” “Expand and Reinforce Global No.1 Businesses” and “Expand Revenues and Profits From Businesses Outside Japan.” LCD color filter is one such “advanced material” that is being promoted under “NT-II” and the company is determined to continue with the expansion of advanced material products business by consolidating and strengthening its own advanced technologies. (Notes) (*1) Polyimide resins Imidized high-temperature-resistant, thermosetting resins. Polyimide materials are superior in surface flatness characteristics and heat resistance during photolithographic processing and also possess excellent processing accuracy, and hence have a competitive edge especially when adding higher-resolution features to color filters used in small and mid-sized applications. (*2) Trans-reflective color filters A color filter that facilitates bright and clear display both indoors and outdoors by dividing the pixels into a transmitting portion that’s lit by a back light and a reflective portion that is illuminated by reflecting the outside light. Toray possesses the higher-resolution technology that utilizes polyimide materials. |
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