October 18, 2007 – With global competition increasing and margins eroding, Japan’s materials suppliers, who own more than half the world’s market, are ramping up efforts to produce new products for use in digital devices, reports the Nikkei daily.
Japanese companies control more than 60% of the 6 trillion yen (US ~$51B) global market for digital materials, such as resin, rubber, fabric and glass, a market seen growing to 10T yen (~$86B) in the next few years. And the Ministry of Economy, Trade and Industry (METI) projects nearly 2x growth in LCD panel materials sales from 2005-2011 to 5.3B yen (~$45.4B).
But competition in South Korea and emerging regions, and profit margins squeezed by falling prices for consumer end products like flat-panel TVs, are causing Japanese suppliers to push ahead to develop new products. Sumotomo Chemical once posted operating profits of ~10% (fiscal 2003-2005), but cheaper flat-panel TVs have squeezed 30% out of prices for polarization films, eroding Sumotomo’s margins to just 1.3% in fiscal 2006, the Nikkei daily noted.
To get back on track, the firm is investing 12B yen (~$103M) for a new photoresist resin plant in Osaka, targeting mass production for the 45nm node in 2008. Meanwhile, JSR Corp. also intends to launch mass production of its photoresist resin next year.
Other firms also are eyeing future business for 45nm chip manufacturing. Mitsubishi Chemical Corp. is pouring funds into R&D to accelerate commercializing of a new material for use in organic electroluminescence panels as early as 2010. The company’s group parent also has longer-range plans to develop an organic membrane-based solar cell that’s thinner and cheaper to manufacture than conventional silicon-based solar cells, hoping to start sales by 2025.
Glass substrates are another sensitive area. Asahi Glass Co., is spending ~30B yen (~$257M) to add a facility in Takasago, Hyogo Prefecture, for producing 10G LCD substrates by 2009 for Sharp Corp. (Some are simply calling it quits — e.g., Nippon Sheet Glass Co. exited the plasma display glass substrate business in the past year.)