Japanese TFT-LCD Panel Maker s Competitiveness and Equipment Market Page 1
Content 1. History of TFT-LCD Panel Capacity by Region 2. Survival Strategy of Japanese TFT-LCD Panel Maker 1. Large TFT-LCD Panel Strategy 2. Small TFT-LCD Panel Strategy 3. TFT-LCD Panel Industry Long Term Trend 4. Equipment Market 1. History of TFT-LCD Array Investment 2. History of Color Filter Investment 3. Forecast of TFT-LCD Panel Investment 4. Forecast of Color Filter Investment Page 2
10 Years History of TFT-LCD Panel Capacity by Region by Mother Glass Sheet Area of Monthly Inputs (Km2/Mo) Km2/Mo 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Worldwide CAGR=50% China Taiwan Korea Japan 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 CAGR:NA CAGR:114% CAGR:53% CAGR:24% CAGR=Compound Annual Growth Ratio Page 3
10 Years History of TFT-LCD Panel Capacity Share% by Mother Glass Sheet Area of Monthly Inputs (Km2/Mo) 100% 3% China 4% 80% 25% Taiwan 49% 60% 40% 72% Korea 35% 20% 0% Japan 12% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Page 4
10 Years TFT-LCD Panel Capacity by Maker by Mother Glass Sheet Area of Monthly Inputs (Km2/Mo) 100% Others 16% 80% 58% CPT 6% 60% 1% CMO AUO 17% 20% 40% 20% 0% 6% 14% 21% LPL SEC Sharp 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 15% 19% 7% Page 5
Survival Strategy of Japanese TFT-LCD Panel Maker 1. Larger Size TFT-LCD Panel Strategy Keep Larger Glass Investment by First Move Advantage. Continuous Investments for Capacity Increasing. Sharp, IPSα 2. Small Size TFT-LCD Panel Strategy Polish the LTPS Technology. Continuous Investments for Capacity Increasing. TMD, Sharp, STLCD(SMTD), Hitachi Page 6
M$ 2,000 1,800 1,600 1,400 1,200 1,000 800 TFT-LCD Panel Fab Investment Amount by Generation @60KSheets/Mo 1,404 1,111 889 831 High Risk 1,851 1,558 600 400 200 0 G5 G5.5 G6 G7 G7.5 G8 FA-CIM 60 62 75 90 103 122 Facility 157 174 235 299 328 395 Build 103 114 161 209 222 269 Module 37 46 58 97 101 132 Cell 111 116 132 172 190 210 Array 363 376 449 536 614 723 Total 831 889 1,111 1,404 1,558 1,851 But, You cannot catch a tiger's cub unless you enter the den!! Page 7
Larger Size TFT-LCD Panel Strategy Sharp will aim 52 wide and 65 wide First Mover Advantage by Larger Glass Investment Sharp Target Panel Size First Mover Advantage by Larger Glass Gen. G5 Major Panel Maker SEC,AUO,CMO G5.5 CMO G6 G7 LPL, AUO SEC G7.5 LPL, AUO G8 Sharp G8.5 SEC G9 G10 SEC? Sharp? G11? Wide TV Panel Size (16:9) Glass Size 32" 37" 40 42" 46" 52" 57" 65" 75" 85" 1100x1300 3 2 2 2 2 1 1300x1500 6 3 2 2 2 2 1 1 1500x1850 8 6 3 3 3 2 2 2 1870x2200 10 8 8 6 6 3 2 2 2 1 1950x2250 12 8 8 8 6 3 3 2 2 2 2160x2460 15 10 8 8 8 6 3 2 2 2 2200x2500 15 10 8 8 8 6 3 3 2 2 2400x2800 18 12 12 10 8 8 6 3 2 2 2850x3050 24 18 15 15 10 8 8 6 3 2 3050x3450 32 24 18 18 15 10 8 8 6 3 = Higher Cost by Lower Productivity = Lower Cost & Higher Productivity Page 8
Larger Size TFT-LCD Panel Strategy Assumption of Cost Analysis by Maker for 52 Wide Full HD Panel Country or Company Japan Korea Taiwan Location Sharp SEC AUO Glass Size (G3~G10) 2160x2460 1870x2200 1950x2250 Installation Year 2006 2004 2006 Inputs Glass sheets(ksheets/month) Panel Size (1.5"-105") Resolution (QCIF~FullHD) 60 52" FullHD Regional Assumptions Future Comp/Matls Cost Down % by Year Labor Cost Ratio (Japan=100%) 100% 11% 60% 50% R&D Cost Ratio (Japan=100%) 100% 80% 50% SG&A Cost Ratio (Japan=100%) 100% 80% 60% Building Cost Ratio (Japan=100%) 100% 70% 60% Module Assembly Status (In-house=0%) 0% 0% 0% Utility Cost Ratio (Japan=100%) 100% 50% 60% Patent Cost Ratio (Japan=100%) 100% 120% 150% Equipment Depreciation Year 5 5 6 Building Depreciation Year 25 15 20 Facility Depreciation Year 10 10 10 Maximum Depreciation % by Region 95% 100% 100% Page 9
Larger Size TFT-LCD Panel Strategy 52 Wide Full HD TFT-LCD Panel by First Mover Advantage Same Generation Same Invest. Year Different Generation Different Invest. Year Japan Korea Taiwan Sharp SEC AUO 1950x2250 1950x2250 1950x2250 2006 2006 2006 Japan Korea Taiwan Sharp SEC AUO 2160x2460 1870x2200 1950x2250 2006 2004 2006 1,800 1,600 1,600 Small Cost Difference 1,400 Big Cost Difference US $ 1,400 1,200 US $ 1,200 1,000 1,000 800 800 600 2007 2008 2009 2010 Sharp 1,578 1,212 1,036 952 SEC 1,555 1,196 1,024 943 AUO 1,535 1,174 1,003 920 600 2007 2008 2009 2010 Sharp 1,183 890 764 697 SEC 1,446 1,134 796 719 AUO 1,535 1,174 1,003 920 Page 10
Small Size TFT-LCD Panels Strategy Assumption of Cost Comparison for Various LTPS and a-si TFT-LCD Panel Good Fair Bad Basic Information In-house Components TFT-LCD Panel Cost Comparison Table Maker A B C D Location Japan Japan Japan Japan Glass Size 600x720 550x670 730x920 370x470 Capacity(Ksheets)/Mo 30 30 10 60 Built Year 1998 2000 2003 1995 Transistor Technology LTPS CMOS LTPS CMOS LTPS CMOS a-si Minimum Design r ule (um) 1.5 3.0 3.0 7.0 Panel Size (inches) 2.4 2.4 2.5 2.4 # of Panels / Mot her Glass 144 120 224 56 Resolut ion 240x320(QVGA) 240x320(QVGA) 960x240 (Delt a) 240x320(QVGA) Integration Circuit level Not Int egr at ion Level Gat e Driver, 6bit DAC, TCON, DC/ DC,Power None Gat e Driver, RGB Selector Switch 6bit DAC, TCON, DC/DC +Power Gat e Driver, RGB Selector Switch 8bit DAC, TCON, DC/DC + Power None All Driver IC Color filter Yes No Yes No Driver IC Manufacturing No No Yes No Page 11
Small Size TFT-LCD Panels Strategy Results of Cost Comparison for Various LTPS and a-si TFT-LCD Panel Basic Information Cost Structure (Yen) TFT-LCD Panel Cost Comparison Table Maker A B C D Location Japan Japan Japan Japan Glass Size 600x720 550x670 730x920 370x470 Capacity(Ksheets)/Mo 30 30 10 60 Built Year 1998 2000 2003 1995 Transistor Technology LTPS CMOS LTPS CMOS LTPS CMOS a-si Depr eciat ion 37 31 260 10 Labor s 280 283 329 351 Color Filter 20 139 20 220 Backlight 333 333 250 333 Dr iver IC 0 326 251 407 Glass 23 20 23 25 Ot her Dir ect Mat er ials 276 277 276 558 Indir ect Mat er ials 76 50 55 25 Utility & others 23 19 24 11 R&D 500 250 250 125 S&GA 107 148 149 194 Pat ent 21 30 30 39 Interests 0 0 0 0 Panel Cost 1,696 1,907 1,914 2,298 Sales Price 2300 2300 2300 2300 Oper at ing Pr ofit 604 393 386 2 Page 12
Small Size TFT-LCD Panels Strategy Toshiba LTPS Roadmap In 2006, 1.5μm with Gen.4 Line will Start-up Source:IMID 06 Added Function: Touch Panel, Finger Print, Color Scanner, Digitizer Page 13
TFT-LCD Panel Industry Long Term Trend Mother Glass Size (Generation) 1.E+08 Gen.? Mother Glass Area (mmxmm) 1.E+07 1.E+06 Gen.11 (3050x3450) Gen.10 (2850x3050) Gen.9 (2400x2800) Gen.8 (2160x2460-2200x2500) Gen.7 (1870x2200-1950x2250) Gen.6 (1500x1800-1500x1850) Gen.5 (1000x1200-1200x1300) Gen.3 (550x650) Gen.3.8 (650x830) Gen.3.5 (620x750) Gen.4 (680x880-730x920) 1.E+05 Gen.2 (370x470) Gen.1 (300x400) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Page 14
TFT-LCD Panel Industry Long Term Trend 100,000 TFT-LCD Display Area TFT-LCD Units 10,000 TFT-LCD Revenue ($) Growth Index (1995=100) 1,000 100 TFT-LCD Investments ($) 10 Area/$ 1 History Forecasts 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Year The trend continues until at least 2010 Page 15
Equipment Market Trend Page 16
10 Years History of TFT-LCD Array Investment by Mother Glass Sheets of Monthly Inputs (Km2/Mo) TFT-LCD Panel Investment by Generation(Glass Ksheets/Mo) 800 700 600 500 400 300 200 100 Grew but Unstable 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2160x2460-2200x2500 0 0 0 0 0 0 0 0 0 25 1870x2200-1950x2250 0 0 0 0 0 0 0 60 98 256 1500x1800-1500x1850 0 0 0 0 0 0 36 230 300 102 1000x1200-1200x1300 0 0 0 0 30 198 354 350 115 303 650x830-730x920 14 7 8 311 99 118 108 83 90 49 550x650-620x750 139 52 208 182 117 78 6 24 6 0 410x520 35 51 43 16 41 1 1 5 7 0 Total 188.0 110.0 259.0 509.0 287.0 395.0 505.0 752.0 616 735 CY Page 17
10 Years History of TFT-LCD Color Filter Investment by Mother Glass Sheets of Monthly Inputs (Km2/Mo) Capacity Addition of TFT-LCD Color Filters by Year by Generation(Glass KSheets/Mo) 900 800 700 600 500 400 300 200 100 0 Grew but Unstable 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 >2100x2400 0 0 0 0 0 0 0 0 0 40 1870x2200/ 1950x2250 0 0 0 0 0 0 0 60 180 240 1500x1800/ 1500x1850 0 0 0 0 0 0 30 250 150 180 1000x1200/ 1200x1300 0 0 0 0 0 250 360 285 150 190 650x8300/ 730x920 0 0 60 465 155 180 75 240 10 20 550x650/ 650x750 323 226 240 60 170 0 0 0 0 0 Total 428 254 300 525 325 430 465 835 510 670 Page 18
TFT-LCD Array Equipment Forecast (M$) TFT FPD Array Equipment 8000 7000 7,140 7,966 Array Repair Array Test TAM (M$) 6000 5000 4000 3000 2000 1000 0 3,821 469 592 1169 4,761 4,720 567 535 777 800 1442 1516 284 362 372 605 729 681 748 1252 2328 573 5,579 565 967 1818 444 1006 769 761 1442 2738 644 1041 2005 2006 2007 2008 2009 2010 CY (1-12) AOI Ion Dope ELA Anneal Clean Wet St r ip Wet Et ch Dr y Et ch/ Ash C/D Exposur e PVD CVD Page 19
Color Filter Equipment Forecast (M$) 2,000 1,985 1,979 1,800 Repair 1,600 AOI 1,400 1,396 1,339 1,400 Wet Clean Post Bake TAM (M$) 1,200 1,000 800 600 1,074 Pre Bake DeHyde Bake PS&Rib- Developer RGB-Developer BM-Developer 400 PS&Rib-Exposur e 200 RGB-Exposure 0 2005 2006 2007 2008 2009 2010 CY (1-12) BM-Exposur e Page 20
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