Taiwan touch panel production value set to grow by 36% YoY to nearly $1 billion in 2009
Due to the iPhone’s popularity and multi-touch support from the upcoming Windows 7, touch screens have become a hot topic in the Taiwan IT industry. Before all this hype, Taiwan was already home to many touch screen makers, due to its strong TFT-LCD and system integrator supply chain. Recently, the number of touch screen makers has been increasing notably. Companies whose businesses range from system integration, LCD, color filter, design house and diffusion film are all seen entering the touch screen industry. The total production value of Taiwan’s touch screen market is projected to reach NTD3.2 billion (USD950 million) in 2009, roughly equivalent to a 36% YoY growth.
Majority of Taiwan touch screen makers belong to the mid or downstream segment
The touch screen consists primarily of the front panel, which senses the hand gestures, and the controller, which interprets the hand movements. The front panel is composed of the ITO glass and ITO film, where they themselves are made up of glass, PET and the ITO target. Such materials are currently mostly supplied by Japanese or US companies, such as Nitto Denko, DuPont, or 3M. The key responsibility of the downstream touch panel makers is to assemble the front panel and Control IC into the touch panel module. Afterwards, system integrators assemble the touch module and LCD panel into the final end product.
Most Taiwanese touch screen companies handle the downstream module assembly process. Companies like YoungFast, JTouch and TransTouch primarily focus on the touch screen assembly. Meanwhile, as the touch screen mostly employs LCD panels, manufacturers such as AUO, Innolux and Wintek are taking advantage of their panel making experience in entering the touch panel segment. Color Filter (CF) suppliers, like Cando and Sintek, which is considered a key segment in the LCD industry, have also forayed in the touch panel making process, as they can easily reconfigure their existing facilities. At the moment, these CF makers have teamed up with a specific LCD maker. Cando has cooperated with AUO, and Sintek has allied with HannStar.
Some system integrators seek to tap the touch assembly by means of establishing a new company or a strategic alliance. For example, Compal has invested in Swenc to produce resistive touch panels; Quanta has joined hands with Wintec on optical imaging touch screen for touch functioned notebook; TransTouch is invested by CMC (CMC Magnetics Corp.), a media storage company. The products of TransTouch include 4wire and 7wire resistive touch panels. Others like Higgstec, Mildex, Dano, and EDT (Emerging Display Technologies) are all downstream touch panel companies.
For the midstream portion, Taiwan companies are involved in the ITO glass/film and controller production. Both Aimcore and AVCT are ITO glass makers, where the former is a spin off of RiTdisplay, an OLED maker. Another ITO glass maker G-Tech is a subsidiary of Innolux, which mainly provides ITO glass for 4wire, 5wire and 8wire resistive touch panels and capacitive touch screens. As for the ITO film, Aimcore is considered one of the suppliers. Diffusion film companies such as Efun and Gamma Optical are planning to mass produce ITO films this year.
The control IC is another important product in the Taiwan touch screen industry. ELAN Microelectronics and EETI (eGalax_eMPIA Technology Incorporation) are two key suppliers. PC chip maker SiS recently announced it will enter the touch screen market, focusing on the capacitive touch screen. PixArt has also recently gained market attention, as there have been market rumors of the company being Quanta’s touch panel IC provider.
Downstream manufacturers contribute 90% of Taiwan’s touch screen production value
According to WitsView’s survey, the touch screen industry’s production value in Taiwan, which includes the touch panel assembly, ITO glass/film and control IC reached NTD23 billion. The downstream assembly took up 94% of the total value, while the ITO glass/film and control IC respectively accounted for a mere 3% and 4%.
With demand continually being driven by multi touch technology and the forthcoming Windows 7 release, Taiwan’s touch screen industry production value is forecasted to reach NTD31.8 billion in 2009, up 36% from 2008. The touch panel assembly will grow by 29% to NTD28.3 billion. However, its share of the total value will drop to 89% from the 94% of 2008, as many companies in the midstream segment have started mass production this year.
To become a NTD50 billion industry in 2012 with a 16.9% growth
Besides handheld devices, PC products like Notebook, Netbook, All-in-one PC or even stand alone monitor start to built-in touch function also, owing to Window7’s launch in 2009 summer.As Taiwan plays an important role in the worldwide PC industry, touch screens have a chance to become a rising star in Taiwan. WitsView predicts the industry will expand into a market with a NTD500 billion production value, equivalent to a 16.9% CAGR growth.
