Signs of Progress for Sharp’s Gen 10.5 Fab
February 12, 2018
Top Engineering disclosed a small order with Sakai SIO, the Chinese division of Sharp that is building its Gen 10.5 LCD plant in Guangzhou, China. The contract indicates that Top will be supplying equipment under the contract through Feb 2019, which correlates to the expected opening of phase 1 of the fab in September 2019. While not a large contract, Top produces a number of tools used in the production of LCD displays, particularly those used to dispense materials such as liquid crystal and sealants. While the delivery date is not specified, we would expect delivery of key tools for this fab early in 2019, as Sharp has considerably more experience in producing large format TV panels based on oxide.
The Guangzhou fab is expected to have a capacity of 45,000 sheets/month for phase 1 and potentially another 45,000 sheets/month for phase 2, although demand for 65”+ panels will set the timing for the phase 2 schedule. The target date is September 2020 for phase 2. Once the initial phase is completed, it will give Sharp two gen 10 fabs, as their Sakai, Japan fab has been in operation since 2009, yet on a capacity basis, BOE will become the largest producer (by capacity) of Gen 10+ panels if they continue to build on schedule, as they are working on or planning two Gen 10+ fabs by the end of 2020.
China’s display prowess has been growing, as has its production capacity, but putting such in perspective can be difficult as there are a number of cities and regions in China where such production takes place. The government of Chongqing (American’s might know it as “Chungking”) has published a few facts that can shed some light on how important the display business is to the city.
First, Chongqing is one of 4 Chinese cities that are considered ‘provinces’, which in itself is unusual given the other 23 are significant regions, rather than municipalities. The 2015 census indicates the ‘city’ has a population of ~30m, of which 18.4m live in an urban setting. The 2011 GDP of $158.9b puts it a bit ahead of the 2016 GDP of Hungary, but on a per capita basis, on par with Bolivia, which is below the average for all of China, and is the home of the 3 Gorges Dam – the World’s largest until 2016. What makes this province important however is BOE’s B8 fab, a 140,000 sheet/month G8 monster and the new HKC Gen 8.6 fab that began production in May of last year, both of which feed and are fed by a huge electronics infrastructure with the likes of Hewlett-Packard and Acer among its residents, making it the ‘laptop capital’ of the world,. By the end of 2016 272 of the world’s 500 largest companies had operations in the province.
LCD Production in Chongqing was up 38.5% in 2017, and the province produced 258m phone units, or somewhere near 15% of the total world output, with PCB production also up 38.5% in 2017 y/y. On a collective basis, ‘electronic manufacturing’ was up 27.5% y/y and it represented 24.1% of the industrial output of the province.