Amid growth in the TFT LCD industry, the industry of a variety of chemical materials, used to manufacture TFT LCDs, is also growing by leaps and bounds. Although chemical materials represent only a small proportion of the total cost, each market of them generates a market value of hundreds of millions to hundreds of billions of dollars, showing off its power as a non-negligible market in terms of scale as well. At the same time, the volume demand from other application fields such as semiconductor is as much as that from the LCD industry. Additionally, the relatively high profitability also forces a number of material companies to jump into the related industry.
As Korea's LCD industry is already very huge in terms of scale and Korea-based panel manufacturers such as Samsung Electronics and LG Display are rushing to introduce new technologies, while showing needs for new materials or advanced materials from the existing ones and actively cooperating for evaluation, Korea in particular is becoming the arena of the struggle among plenty of chemical materials producers.
It's noticeable that companies directly linked to panel makers, such as LG Chem and Cheil Industries are rushing to secure their own market. In the meantime, chemical conglomerates, Korea-based chemical subsidiaries of conglomerates and older LCD chemical materials makers (TSCC, Dongwoo Fine-Chem, Dongjin Semichem, etc.) are attempting to expand the item category from the conventional items to others.
The chemical materials market was considered as special materials, and therefore, it was a monopoly market dominated by only few firms. Now, a number of newcomers are entering the market that boasts high profitability and growth feasibility, leading to more stiff competition.
Photoresist: Dongjin Semichem maintains a market share of 50%
AZEM (former Clariant), Zeon, TOK and Sumitomo Chemical have traditionally dominated the photoresist market for TFT-LCD electrode processing use. These four firms are also providing products to Korea. However, since 2005, Dongjin Semichem has been gaining market share to take the No. 1 in Korea after 2007. Compared to the company, AZEM, Zeon and Dongwoo Fine-Chem (Sumitomo Chemical's products) are seeing their market share drop.
Dongjin Semichem, a supplier for both Samsung Electronics and LG Display, has maintained a market share of 50%, because there have been no special changes in supply activities over the past three years.
Meanwhile, AZEM ranked second in 2008, available only with its shipments to Samsung Electronics. After that, it has failed to increase the supply share while maintaining around 20% market share. By contrast, Zeon is providing products only to LG Display and it has registered the sharpest fall in market share over the past three years. This is stemmed from the suspension of shipments to Paju line in 2009.
Kotem (TOK product) that is growing as one of LG Display's two top suppliers of photo resist is expected to expand its market share dramatically in 2010, surging from 5% in 2008, fueled by the increased volume sold to the Paju line.
Liquid Crystal: Arena of the Struggle between Global No. 1 and 2 Players
As in the global liquid crystal market, Merck and Chisso are sharing the market dominance in Korea.
Just one change currently appearing is that Chisso is expanding market share, driving Merck's market share to drop from significantly high 65% in 2008 to 52% by 2009. Chisso is enjoying a steady upward trend in share.
In 2010, Chisso is expected to outpace Merck for the first time, while DIC is providing a small volume of products to Samsung Electronics, but showing a remote chance of making an influence on the competition between the top two.
Competition between the two companies is expected to continue and panel vendors' adoption of new products developed and introduced by the two now is forecast to determine their performance result after 2011.
Wet Chemical: Signs of Huge Changes in Striper Market
In the local etchant market, which has been dominated by two strong over the past years, ENF Technology has become a newcomer by developing Cu etchant and providing it to LGD from 2009, but its performance result still remains negligible.
Roughly 70% of the total market for 2008 was penetrated by Dongwoo Fine-Chem. Its market share, however, has continued to decline, shedding light on the forecast that its gap with Techno Semichem will narrow to around 5% in 2010.
In the past, Techno Semichem grabbed less market share than Dongwoo Fine-Chem, even though it is one of the two etchant suppliers. However, the corporation is currently in the same position as the big rival is.
ENF Technology is shipping a small volume only to LG Display and its somewhat inferior product quality to the conventional firms' dull possibilities that its market share will climb in the future. However, this is very meaningful because it is the first etchant provider to major panel manufacturers except for the two etchant producers (excluding non-mainstream products including Cr etchant).
Besides, Dongjin Semichem is working on development of Cu etchant in an effort to provide Cu etchant to Samsung Electronics. It's said that the initial supply has been settled to some extent.
In the future, Samsung Electronics' Cu etchant supply chain trend is forecast to determine the market share trend after 2011.
In 2008, LG Chem and Dongwoo Fine-Chem (MBI product OEM) dominated the Korean striper market evenly. However, the year 2009 showed a marked change amid the advent of newcomers such as LTC and ENF.
As Samsung Electronics has partially shifted from the traditional organic compound products toward water based products Starting from 2009, LTC and ENF Technology started to take part in the supply. In 2010, LTC and ENF are forecast to together control more than 15% of the entire market triggered by the start of their full-scale supply expansion to Samsung Electronics.
On the other hand, LG Display is significantly increasing the volume demand satisfied by Dongjin Semichem in 2010, resulting in a slight decline in LG Chem's domestic market share..
On a domestic market share basis for 2010, LG Chem is expected to top the list with 35%, followed by Dongwoo Fine-Chem (MBI product OEM) and Dongjin Semichem ranking second and third, respectively. LTC and ENF will also follow the third player.
In the future domestic market, LG Chem and Dongjin Semichem are predicted to maintain their current levels of market share. By contrast, LTC and ENF are forecast to enjoy a steady rise in share, while Dongwoo Fine-Chem will further lose its share.
Korea's TMAH (Posi PR developer) market shows that the penetration ratios of Handuk Chemical, the only supplier of Samsung Electronics, and NEPES, the only supplier of LG Display, concur with the two top panel vendors' demand share, which is a long-lasting market structure over the years.
The two providers are dividing the whole market at a ratio of 5:5 and this is predicted to continue in the future.
Special Gas: Air Products and Sodiff are the two Strong
NF3 suppliers targeting Samsung Electronics are Air Products, Sodiff and Daesung Industrial Gases, and Air Products takes the lead, followed by Sodiff and Daesung.
Until 2008, Air Products held a monopoly in the field of SiH4, but from 2009, Praxair kicked off shipments; thereby, there are now two major providers.
Other special gases, except for the two gases above and NH3, are purchased by only one company, in most cases from Daesung.
It's evaluated that Daesung Industrial Gases is mostly importing raw materials from overseas to provide products.
Five companies including Air Products, Sodiff and Daesung Industrial Gases had shipped NF3 to LG Display until 2008, but only four of them excluding Air Products have been providing products since 2009. Major companies with a huge volume are Sodiff and Daesung Industrial Gases.
SiH4 is sold by Daesung Industrial Gases and Sodiff. Up until 2009, Daesung had shipped a large volume, while from 2010, Sodiff is increasing its volume.
Other special gases, except for the two gases above, are purchased by only one company, in most cases from Daesung.
Contenders in the Korean color resist market include JSR, Dongwoo Fine-Chem, LG Chem and Cheil Industries.
LG Chem that is supplying more than 75% of LG Display's entire production requirement is maintaining the domestic No. 1 place in terms of market share by achieving more than 40% of the total market.
Backed by the large volume not only caused by its considerable part of Samsung Electronics' production requirement, but also caused by shipments to its own CF fabrication line, Dongwoo Fine-Chem recorded a marked share of more than 30% in 2008. After 2009, however, amid Cheil Industries' start of shipping color resist to Samsung's Tanjeong line, Dongwoo's market share slid somewhat in 2009. However, in 2010, it is expected to retain its market share quite a bit after the start of supplying products to LG Display.
Starting from 2009, when its shipments to Samsung Electronics began increasing in full scale, Cheil Industries has recorded a market share of approximately 10%. In 2010, its market share is expected to remain flat from 2009.
JSR is providing products to the two major customers, and is forecast to account for almost one fourth of the total market.
In the future, the market share trend is predicted to be restrained in 2010 without big changes in market share at conventional lines, while according to changes in volume from Dongwoo Fine-Chem to LG Display and changes in the supply chain at Samsung Electronics' 8th generation line (The purchase volume from Cheil Industries would possibly increase), Cheil Industries and Dongwoo Fine-Chem are forecast to see a slight rise in market share.
TOK, Cheil Industries and Techno Semichem are vying in the Korean resin BM market.
Ceil Industries that are satisfying the most demand from Samsung Electronics and 100% of that from Dongwoo Fine-Chem controls 50% of the market, while TOK providing resin BM only to LG Display maintains 30% to 40% market share by continuously penetrating the volume demand from LG Display.
Techno Semichem (MCSC, a joint venture with Mitsubishi Chemical Corporation, in charge of manufacture) is a resin BM supplier of the two giant customers, Samsung Electronics and LG Display, but its volume is too low to meet the customers' demand. Under this circumstance, Techno Semichem is jet controlling a much lower market share than its rivals', Cheil Industries and TOK.
Given the expectation that there will be nearly no change in the supply situation of resin BM to Samsung Electronics and Dongwoo Fine-Chem, it will have the biggest impact on the future penetration trend whether Techno Semichem (MCSC) supplies products to LG Display's Paju plant or not.
As mentioned above, however, the supply chain of Samsung Electronics and Dongwoo Fine-Chem is expected not to change, helping Cheil Industries to continuously maintain its lead.
Contenders in the Korean overcoat market include Chisso, Colon, LG Chem and JSR.
In 2008, Chisso and Colon, each of which is a main supplier to Samsung Electronics and LG Display, respectively, represent more than 30% of the total market each. Next to the two stronger, JSR has suffered from a sharp decrease in market share after it lost the supply volume to LG Display. Before that, JSR produces products for all the three major customers, Samsung Electronics, LG Display and Dongwoo Fine-Chem. By contrast, LG Chem began providing products to LG Display from 2009 and consequently, its market share almost doubled from below 10% in 2008 to 2009.
Judging that its supply volume to Samsung Electronics has not been changed and the future market has also no possibility of any changes, Chisso is forecast to continue to take the lead in market share.
Kolon is predicted to be pitted against LG Chem for the second or third place, because the supply chain to LG Display will be split into Kolon and LG Chem.
No special changes, except for LG Chem's increasing volume toward LG Display's Paju line, are expected to appear; therefore, the market share trend for 2010 is forecast to remain almost unchanged in the future.
In Korea's photo spacer market, JSR, LG Chem, EXAX and Samyang EMS are competing with each other.
It's estimated that JSR, the supplier of both Samsung Electronics and LG Display, captures the largest market share in the Korean market.
From 2008 through 2009, JSR represented almost 70% to 75% of the overall market, but is forecast to lose its share in 2010, as LG Display's decided to purchase materials for its 8th generation line from LG Chem and two of Dongwoo Fine-Chem's CF fabs began using Samyang EMS's products.
LG Chem is satisfying roughly 50% of LG Display's demand. In the meantime, although EXAX is selling products to LG Display's Gumi lines P2 and P3, it has a low market share because of the small demand volume.
Taking into account the possibility that its shipments to Dongwoo Fine-Chem will edge up and it will begin providing products to Samsung Electronics in the second half of this year or in the first half of next year, Samyang EMS is expected to gain market share steadily. Going forward, if its shipments to Samsung Electronics commence in the second half of 2010, it could outpace EXAX in market share.
source: Displaybank
