With domestic glass makers still heavily reliant on imported technology and materials, the price and supply of panel glass is more volatile than ever.
By XU Shiqi
On December 10, one of NEG’s glass factories in Kansai, Japan lost power unexpectedly for five hours. Production grounded to a halt, causing severe damage to some systems, and will take three or four months to get going again.
This small event turns out to be much more serious than it seemed at the time and may lead to a full-blown glass shortage.
Japanese LCD glass substrate manufacturer, Nippon Electric Glass (NEG), produces important raw materials through complex processes that require precise temperature control. The power outage has already caused a shortage of aluminosilicate. NEG controls nearly 20 percent of the world glass substrate market. If the factory shuts down for 4 months, it will directly affect the supply to customers, exacerbating an already tight situation and pushing prices up. Panel prices have already increased by 50-70 percent since June.
China, represented by BOE and TCL Technology, produces nearly 60 percent of the world’s glass.
Companies that have a stable supply of glass substrates are accelerating mergers and acquisitions to profit from the increase in panel prices. TCL does not deal with NEG, and claims its own production will not be affected.
Three companies from overseas control almost 90 percent entire glass substrate market: Corning from the US, along with AGC and NEG of Japan. Corning alone controls nearly 50 percent of the market. High-generation glass substrates are technically difficult to make. Corning and NEG have mastered core technologies, established certain patent barriers and monopolized the global market, so China’s glassmakers are entirely reliant on overseas suppliers.
However, China is making efforts. Glass substrates are a strategic emerging industry supported by the central government, and there is great potential for domestic substitution. Domestic suppliers of glass substrates are represented by Dongxu Optoelectronics and Rainbow Co., Ltd. Rainbow's 8.5+ glass substrate production line with independent intellectual property rights is up and running.
In addition to glass substrates, the panel industry has other core equipment and materials that also rely on imports and still needs to make breakthroughs to increase self-sufficiency.
