AIRLINK 75.25 Increased By ▲ 1.55 (2.1%)
BOP 4.90 No Change ▼ 0.00 (0%)
CNERGY 4.42 Decreased By ▼ -0.10 (-2.21%)
DFML 43.45 Decreased By ▼ -1.43 (-3.19%)
DGKC 84.80 Decreased By ▼ -0.70 (-0.82%)
FCCL 21.23 Decreased By ▼ -0.17 (-0.79%)
FFBL 32.39 Decreased By ▼ -0.12 (-0.37%)
FFL 9.50 Decreased By ▼ -0.09 (-0.94%)
GGL 10.13 Decreased By ▼ -0.14 (-1.36%)
HASCOL 6.97 Decreased By ▼ -0.16 (-2.24%)
HBL 114.67 Decreased By ▼ -0.03 (-0.03%)
HUBC 139.45 Increased By ▲ 0.35 (0.25%)
HUMNL 12.10 Decreased By ▼ -0.32 (-2.58%)
KEL 4.95 Decreased By ▼ -0.08 (-1.59%)
KOSM 4.40 Decreased By ▼ -0.05 (-1.12%)
MLCF 37.24 Decreased By ▼ -0.36 (-0.96%)
OGDC 134.25 Decreased By ▼ -2.55 (-1.86%)
PAEL 25.25 Decreased By ▼ -0.14 (-0.55%)
PIBTL 6.61 Decreased By ▼ -0.08 (-1.2%)
PPL 119.20 Decreased By ▼ -1.80 (-1.49%)
PRL 26.45 Decreased By ▼ -0.14 (-0.53%)
PTC 13.75 Decreased By ▼ -0.35 (-2.48%)
SEARL 57.00 Decreased By ▼ -0.30 (-0.52%)
SNGP 66.92 Decreased By ▼ -1.08 (-1.59%)
SSGC 10.33 Decreased By ▼ -0.09 (-0.86%)
TELE 8.34 Decreased By ▼ -0.11 (-1.3%)
TPLP 10.89 Decreased By ▼ -0.09 (-0.82%)
TRG 62.75 Decreased By ▼ -0.59 (-0.93%)
UNITY 26.97 Decreased By ▼ -0.08 (-0.3%)
WTL 1.35 Decreased By ▼ -0.03 (-2.17%)
BR100 7,913 Decreased By -28.1 (-0.35%)
BR30 25,406 Decreased By -242.3 (-0.94%)
KSE100 75,351 Decreased By -166.9 (-0.22%)
KSE30 24,195 Decreased By -82.4 (-0.34%)

Faced with slumping sales of photographic film, Japan's Fuji Photo Film is placing a big bet that an expected boom in the liquid crystal display (LCD) television market will become a pillar of its future growth.
But Fuji Photo, which recently unveiled plans to invest $1 billion over the next four years on optical films used in LCDs and other display materials, has plenty of company in the fast-growing and increasingly competitive field of LCD-use film.
Nitto Denko Corp, Taiwan's Optimax Technology Corp and South Korea's LG Chem Ltd are also members of the small army of chemical firms in Asia ramping up production of LCD film to keep up with soaring LCD TV sales.
"We view this (the growing LCD TV market) as a big chance for our company," said Naoki Hama, manager of Fuji Photo's flat panel display materials division, in a recent interview.
LCD film is a generic term referring to about 10 different types of optical film used to enhance LCD picture quality or correct certain problems inherent to the technology such as a narrow viewing angle or poor colour tone.
The industry has grown briskly in recent years thanks to the use of LCDs in computer monitors and mobile phones. But it's the promise of the TV market, which requires larger panels and thus more film, that is exciting analysts now.
Nomura Securities analyst Nobuhito Owaki estimates the LCD film industry is likely to exceed 300 billion yen ($2.73 billion) in Japan's next fiscal year to March 2005 after growing about 50 percent year-on-year to 240 billion yen ($2.20 billion) in the current fiscal year.
"At the very least, supplies (of LCD film) will be tight for the first half of 2004 as set makers look to sell a lot of TVs for the Olympics," said Yuzuru Sato, an analyst at CLSA Asia-Pacific Markets, referring to the Athens games in August.
Independent researcher DisplaySearch estimates the LCD TV market, led by names like Sharp Corp and South Korea's Samsung Electronics Co, will balloon to 35.6 million units in 2007 from around four million last year.
Chemical firms are thus gearing up to produce more polarisation film, an indispensable film that allows only light moving on a certain axis to pass to the panel. Without it, the LCD would appear merely as a bright screen.
Osaka-based Nitto Denko, for one, will spend about $200 million in the current business year to March 31 to expand its manufacturing capacity for LCD polarisation film by 80 percent to an industry-leading 43 million square metres per year.
But analysts say LG Chem and Optimax are steadily chipping away at the position of Nitto Denko, the world's top maker of LCD film with a market share above 50 percent, although it is expected to maintain its dominant position in high-end film.
"Optimax is gaining share in Taiwan and LG Chem is making headway in South Korea. Japanese makers are watching their market share fall, mainly in the low end of the market for LCD film," said Nomura's Owaki.
LG Chem is planning to raise capacity to 26 million square metres by 2006 from 9.3 million as of the end of this month, while Optimax said it would construct two new lines to lift its annual capacity by 75 percent to 36 million square metres by the end of this year.
Japan's Sumitomo Chemical Co announced this week that it would build additional production lines for polarisation film in Taiwan and South Korea, boosting its capacity by 50 percent to 24 million square metres per year.
But the toughest competition could be in retardation film, which corrects colour distortion in LCDs and is an essential part of VA-mode (vertical alignment mode) panels - a type of panel analysts expect to become the norm for big-screen LCD TVs.
In fact, Fuji Photo's $1 billion investment is in large part aimed at VA-mode retardation film, a high-growth, high-margin area now dominated by JSR Corp's Arton film and Zeon Corp's Zeonor film.
Fuji Photo is the world's largest maker of triacetyl cellulose (TAC) film, which Nitto Denko and other polarisation film makers purchase and combine with a polyvinyl alcohol (PVA) film made by Kuraray Corp to produce polarisation film.
But Fuji Photo has developed a new TAC film that has been "extended" to produce retardation properties. That could spell trouble for JSR and Zeon if polarisation film makers, under constant pressure to lower costs, give priority to pricing.
Precision equipment maker Konica Minolta Holdings Inc is also developing a so-called "extension TAC" film.
"It is believed that extension TAC will not offer the same level of performance as Arton and Zeonor, but it is expected to cost a lot less," Nomura's Owaki said.

Copyright Reuters, 2004

Comments

Comments are closed.