Korea Display Equipment Material Industry Display Association chief calls for new approach to government support Over the past decade, the government's policy for development of the domestic display equipment material industry had been focused on funding assistance and development of basic technologies. Thanks to the government's active support, most of the nation's top 30 display equipment makers possess globallevel technology. However, none of them is included in the list of the world's top 10 display equipment material companies. Accordingly, the government needs to shift the focus of its support policy for display equipment material makers to enhancement of price competitiveness and improvement of quality, said Moon Sun-mok, senior executive director of the Korea Display Equipment Material Industry Association. Firstly, the focus of the policy should shift away from the market preoccupation and cost-saving method through new investment in large lines, exceeding the 6th-generation. Instead, what is needed is to enhance price competitiveness and improve quality through development of new processes and methods and securing basic technologies, Moon said. While operating the 8th-generation line in the fourth quarter of 2006 for the first time in the world, Sharp of Japan employed a new method and succeeded in reducing cost drastically through close cooperation networks with its equipment, parts and material business partners. Through joint development of new technologies and process methods with its subcontractors, Sharp has been securing basic technologies related to new materials, while keeping its top position in the world's display equipment, parts and material markets. Accordingly, the domestic panel industry is required to place the first priority on securing basic technologies through joint development of parts for equipment, Moon said. Secondly, government support should be focused on development of competitive equipment for mass production, parts and materials, away from the deep attachment to development of basic technologies, he said. The biggest task to be solved by the nation's display industry is "cost reduction," which decides market competitiveness. Namely, reformative changes for cost reduction are required through improvement of processing and change of paradigms of the present panel production process. However, domestic panel companies, equipment, parts and material firms can do it independently. They can secure basic technologies independently, but the competitiveness in mass production should be verified in the mass production line of panel manufacturing companies. As a result, panel companies and equipment and parts makers should jointly develop technologies for mass production and more opportunities for joint development with large companies that will become buyers of the products later should be offered, he said. Thirdly, it is necessary to identify items with high potential for survival in the market on a long-term basis and localize the selected items, avoiding the past practice of blindly expanding the number of items for localization. For instance, such parts as gauges, valves and controllers have been dominated by some world-famous brands as they sell them at a low price through mass sales. Accordingly, even if Korean companies have secured basic technologies for gauges, valves and controllers, it is difficult for them to secure price competitiveness in these fields. Fourthly, government support, which focused on R&D sector and small and medium-sized companies in the past, should shift to marketing, securing patent competitiveness and market information, Moon said. Related to this, the Korea Display Equipment Material Industry Association has been promoting the "semiconductor display patent consortium," where small and medium-sized semiconductor and display equipment makers and large companies jointly create a patent consortium to effectively cope with possible patent disputes since December 2004. Besides, the association has persistently offered information about strategic advancement into China, Taiwan and Hong Kong, participation in overseas exhibitions and domestic and foreign display industries to its members. However, the government's assistance in this field is very fragile compared with that in the R&D sector and the cooperation with large companies in this field is also insufficient. Introduction of equipment makers that succeeded in localization At the Korea Display Conference (KDC) 2006 held at COEX in Seoul on July 6-7-jointly organized by the Korea Display Equipment Material Industry Association and Display Bank-LG. Philips LCD introduced an equipment-maker that succeeded in enhancing technology and mass production through joint development with it. KC-tech succeeded in mass production of spinless coaters that can save the existing spin-method coating processing raw materials by over 90 percent. It was selected as the next-generation's top product. PECVD of Jusung Engineering is supplying 5th to 7th-generation equipment to foreign countries, including Taiwan and China, owing to its independent technology and confidence in mass production in the equipment market, which has been dominated by AKT of the United States. Top Engineering successfully developed a dispenser and localized the product since the 5th-generation up to 100 percent. Besides, ADP Engineering succeeded in developing dry etcher for the first time in the country and entered mass production, whereas Avaco is near to make a success for localization of the 7th-generation sputter equipment. Future tasks of Korea Display Equipment Material Industry Association Among the major tasks to be pursued by the association are improvement of systems, including tariff, assistance to the local equipment material industry, and the setup of the Display Industrial Association, Moon said. Firstly, the 8% basic tariff has been imposed on parts of equipment at present, even though there is no tariff on imports of display core equipment under the international agreement, generating tariff imbalance between equipment and parts and causing reverse discrimination between imported equipment and domestic equipment. To settle this problem, the Ministry of Commerce, Industry and Energy and the Ministry of Finance and Economy are currently engaging in close negotiations. Secondly, the association plans to actively support Korean equipment material makers' advancement into overseas markets by consolidating cooperation with the government and large companies. Along with this, it will make a strong push for the semiconductor display patent consortium project, strategic assistance for Korean companies' advancement into China, Taiwan and Hong Kong, operation of the Korean Pavilion at Finetech Japan and offering of market statistics on display. Thirdly, Korea is striving to establish the Display Industrial Association that will actively seek ways for the development of the display industry. As the economic conditions have deteriorated and the chase by competitors has intensified, it is urgent to set up such an association in order to lead the global display market, Moon said. Korea Display Equipment Material Industry Association, established in 2003 to represent common interests of domestic display makers, now has 113 member companies, including 67 equipment makers and 38 material manufacturers.