High quality at low cost remains the long-term objective LCD modules forge ahead against adversity

Liquid crystal display modules comprise three primary types: TN, STN, and TFT. TN liquid crystal modules support monochrome display and are suitable for low-end watches, electronic calculators, telephones, and fax machines. STN liquid crystal display modules are commonly employed in industrial equipment, tools and instruments, automotive electronics, medical devices, and consumer electronics. Meanwhile, full-colour display mobile phones, portable DVD players, notebooks, monitors, and televisions predominantly utilise TFT liquid crystal display modules. Consequently, some manufacturers assert that this very diversity of applications underpins the growth of the LCD industry.

As TN/STN/CSTN LCD modules mature and competition intensifies from both TFT LCD modules and OLED displays, an increasing number of Chinese manufacturers are pivoting their production focus towards TFT LCD modules. Moreover, the combination of high quality and low cost is another factor driving the growing preference for TFT LCD modules. The market for CSTN LCD modules, previously prevalent in mid-to-low-end mobile phones, MP3/MP4 players, and full-colour display PDAs, is now being steadily eroded by TFT display modules. Diverse Product Range, Broad Market Coverage Types of LCD Modules China's LCD module industry comprises approximately 180 major manufacturers, with around 100 producing TN/STN/CSTN LCD modules.

Currently, Chinese manufacturers collectively operate over 160 production lines for TN/STN liquid crystal panels. These panels are utilised for in-house purposes and also sold commercially, primarily to domestic enterprises. At least 80 manufacturers produce TFT liquid crystal display modules. Presently, approximately 60 Chinese manufacturers can supply small-to-medium-sized TFT liquid crystal display modules, while at least 20 can provide large-sized TFT liquid crystal display modules. Beyond these enterprises, China hosts numerous smaller firms specialising solely in LCD module assembly. These companies source either TN/STN panels locally or procure TFT panels from Taiwan, South Korea, and Japan. Consequently, they face clear disadvantages in cost competitiveness and delivery times compared to larger manufacturers. However, these smaller players offer flexibility in order volume, minimum order quantities, and model diversity per batch – advantages lacking in larger enterprises. Foreign-funded enterprises continue to dominate China's TFT LCD module production, possessing far greater manufacturing capacity than domestic players. Local governments and industry associations are restructuring economic infrastructure to foster the development of China's LCD module sector. Chinese enterprises including Beijing BOE Optoelectronics Technology Co., Ltd., Shenzhen Super Optoelectronics (Shenzhen) Co., Ltd., Longteng Optoelectronics Co., Ltd., and Shanghai GED NEC have each established 5G TFT production lines. Presently, Shenzhen Tianma Microelectronics Co., Ltd. operates one 4.5G TFT line, while Shantou Xinyi possesses one 2.5G TFT line. Plans are underway to establish three 4.5G and three 6G production lines within the next three years. China's LCD module production encompasses diverse types from standard to customised modules, catering to all market tiers. This includes TN, HTN, STN, FSTN, CSTN, and TFT modules; dot matrix, character, segment, and graphic LCD modules; employing COG, COF, TAB, and COB bonding methods. TN/STN LCD modules are typically employed in various entry-level finished products, including novelty calculators, alarm clocks, and watches with irregular shapes. These bespoke items feature a high degree of customisation, with manufacturers occasionally employing specialised printing methods. Due to application limitations and significant technical barriers, few Chinese manufacturers mass-produce such customised modules. CSTN and TFT LCD modules primarily target the high-end market, owing to their significantly higher development costs compared to TN/STN modules. These modules are typically standardised. Production volumes of CSTN LCD modules have declined alongside shrinking market demand. Despite the growing popularity of TFT LCD modules, manufacturers have yet to implement rapid expansion plans. This is primarily due to rising inventory and raw material costs, particularly for TFT panels and chips. Most Chinese manufacturers focus on TN/STN/CSTN products for applications in communications, consumer electronics, automotive, and office automation. Presently, TN/STN or TFT LCD modules are increasingly employed in new-generation consumer electronics. Manufacturers anticipate that low-end standard TN/STN monochrome LCD modules will continue to dominate the market in the coming years. However, significantly increased market demand for high-end static image displays is stimulating more manufacturers to produce a greater variety of related products. Additionally, COG technology offers lower costs than COB, making it increasingly favoured by manufacturers. COG bonding facilitates easier integration of small components into finished products. Colour display and clarity are R&D priorities. Research and development for Chinese LCD modules centres on enhancing colour reproduction and display clarity. Furthermore, manufacturers are committed to researching cost-effective raw materials and technologies.

As production costs for CSTN and TFT LCD modules stabilise, the price differential with TN/STN LCD modules is gradually narrowing. Chinese manufacturers anticipate a significant leap in the transition from monochrome to colour displays within the near term. Companies plan to bolster their R&D capabilities to increase TFT LCD module output, particularly for applications in gaming consoles, household appliances, medical equipment, dashboard indicators, and public information displays. Expanding the industrial applications of STN LCD modules forms part of manufacturers' R&D agenda. Concurrently, in backlighting technology, manufacturers are focusing on developing red and mixed-colour support technologies to replace conventional yellow-green-white backlights. Some Chinese manufacturers are adopting DSTN technology to achieve faster refresh rates, while a minority are intensifying R&D into single-chip control for 4.3-inch TFT LCD modules to replace standard dual-chip solutions. Other manufacturers employ fogged polarising films and specialised liquid crystals as alternatives to the more costly dyed liquid crystals. Chinese LCD module producers plan to continue R&D in chip and backlighting components, with the long-term objective of enhancing product quality while reducing production costs. The ultimate pursuit involves achieving higher contrast ratios, wider viewing angles, and broader temperature tolerance ranges. Additionally, manufacturers are exploring methods to reduce energy consumption without compromising display quality, thereby meeting market demands for low-end products.

To circumvent intellectual property issues, most manufacturers' production systems have obtained safety certifications and launched patented products. Currently, some suppliers offer patented 8-colour field-sequence colour LCD modules and dot-matrix field-sequence LCD modules, while others have developed CSTN LCD modules for mobile phones that remain clearly visible even under direct sunlight. Cost-driven price fluctuations In October 2008, LCD module order volumes declined. Manufacturers anticipate this trend will persist until late 2009. Beyond sluggish export markets, the domestic Chinese market faces crisis as local buyers declare bankruptcy, prompting increasing numbers of manufacturers to explore new avenues for sustaining operations. A minority of enterprises mitigate losses by accelerating product transitions and locking exchange rates upon order placement. Others automate production on labour-intensive LCD module assembly lines.

Manufacturers anticipate that in the coming months, as corporate mergers increase, more enterprises will exit the LCD module production line. Currently, fewer than 20 manufacturers possess monthly production capacities exceeding one million units. However, with expanding demand and reduced costs, the outlook is favourable for TN/STN and TFT LCD module producers, particularly for large-scale manufacturers. Some manufacturers state that price fluctuations are an inevitable phenomenon. Graphic STN LCD modules (100×64 dots) are priced between US$5–6, 4.3-inch TFT LCD modules cost US$18–19, and 17-inch TFT LCD modules range from US$160–170. However, due to fluctuating costs and market volatility, TFT LCD module prices do not consistently exceed those of TN, STN, or CSTN types. Certain FSTN graphic LCD modules can command prices as high as $34. Manufacturers anticipate that prices for TN, STN, and CSTN LCD modules will stabilise in 2009, while TFT LCD modules are expected to decline. Approximately 75% of LCD module production costs are determined by the liquid crystal panel, backlight, and chip. TFT panels are primarily sourced from leading manufacturers such as Chi Mei Optoelectronics Corporation and LG Electronics.