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TFT LCD equipment spending to hit $13.2B this year

Posted: 28 Apr 2010 ?? ?Print Version ?Bookmark and Share

Keywords:LCD? LCD equipment spending? panel maker?

TFT LCD manufacturing equipment spending is forecast to shoot from the recession-induced low of $7 billion in 2009 to approach previous cycle peaks with $13.2 billion in 2010. Amid sustained high factory utilization, LCD producers in Korea, Taiwan and China are expanding capacity or building new fabs on continuously improving demand expectations.

"The investment side of the Crystal Cycle has entered a kind of self-accelerating phase," stated Charles Annis, DisplaySearch VP of manufacturing research. "Most leading LCD panel makers are trying to pull in capacity expansions as fast as they can, and are competing to secure equipment orders. This should translate to a very healthy year for many equipment companies."

Demand remained robust through Q1 10, due in part to strong demand from China before and during the Lunar New Year holiday and as LCD TVs rapidly displace CRTs in the high growth market. In turn, this helped sustain industry wide average fab utilization around 90 percent from Q3 09 through Q1 10. With fab utilization nearly maxed out, panel makers need to invest now in order to continue to increase output.

"Many of the expansions and new fabs being built this year will continue to install equipment well into 2011, but as all this capacity ramps to full production, demand will have to continue to grow at high rates or the industry could be setting itself up for the next major over-supply and down side of the Crystal Cycle in 2012," Annis added.

TFT LCD Manufacturing Equipment Market

Korea will account for the majority of equipment purchases in 2010. In 2011, the China capacity race is expected to really take off. The rapid growth of the China market creates a variety of both challenges and opportunities for capital equipment companies. The opportunity of an expanded customer base is attractive for all suppliers and in particular for Korea equipment companies that are very cost competitive.

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