IHS's Sweta agreed that demand for IGZO is on the rise.
"As high resolution display is fast growing, an increasing number of display manufacturers are converting their existing a-Si (amorphous silicon) TFT LCD process into oxide TFT process starting with Sharp. IGZO is the specific Oxide TFT process."
The reason why everyone is going for Oxide TFT is that it "offers the potential for high resolution panels with lower power consumption," Sweta said. "It can be used for high resolution LCD panel. It can also be used as a backplane for OLED panel."
But let's not forget that IGZO isn't Sharp's proprietary invention.
As Sweta explained:
There is an IGZO patent developed by scientists, and these companies have patent licensing agreement on IGZO panels. Samsung and LG Displays are also working on oxide TFT. Taiwan's AUO is also planning to have oxide TFT capacity. Other Chinese panel suppliers such as BOE and China Star are also planning to have oxide TFT capacity.
In other words, the whole world is catching up. And they are coming fast and furious.
Sure, Sharp was the first in the world to successfully mass-produce IGZO panels. But with Taiwan's AUO and South Korea's Samsung also establishing mass production setups for IGZO panels, Sharp's current edge over its competitors on IGZO won't last. Some estimates have Sharp to losing its competitive advantage in about two years.
Against this backdrop, Sharp's decision to partner with China's CEC to produce the advanced LCD panels at low cost is a critical step.
For many Japanese electronics companies, who have been adamant in closely guarding their technologies by controlling everything from development to production in-house, it's time to acknowledge that those days are long gone.
China's display production capability
The acknowledged leaders in flat panel manufacture in China include: BOE, IVO, China Star, Tianma, and CEC. "They are using mostly Amorphous silicon LCD technology" today, said Sweta.
Of the global market, China had about an 11 percent production share in the large LCD market generally defined as 10-inch and above displays application segment, according to IHS. "They include tablet, notebook, monitor and TV." When it comes to small and medium LCD market, China has also about an 11 percent production capacity share, Sweta added.
Asked about the level of their production capabilities, Sweta explained that BOE and China Star both have Gen 8 fabs, whereas CEC has only Gen 6 fab.
The new agreement with Sharp "will give CEC ability to have Gen 8 fab capacity in future. It will also help to increase China panel suppliers' capacity further increasing their production share in the world market," Sweta concluded.
Just to clarify, by citing Gen 6, Gen 8 and Gen 10 fabs, analysts are describing LCD factory size. The number refers to the size of the glass substrate(mother glass) from which panels can be cut.
For example, Gen 8 glass substrate size is 2200 x 2500, or 2.2 by 2.5 meters. Panel suppliers can cut four 60-inch panels from one Gen 8 glass substrate. Sweta explained, "In the case of 10 Gen, substrate size is 2880 x 3130. Panel suppliers can cut eight 60-inch panels from one glass substrate."
Today, Sharp is still the only company in the world to have a 10th Generation LCD fab.