A local media source, Commercial Times (工商時報), reported on the 11th that He Zhaoyang, CEO of Taiwanese polarizer maker Cheng Mei Materials Technology (CMMT), said, "We raised the selling prices of polarizers shipped from Kunshan factory in China. And material polarizer maker SAPO in Shenzhen, China, in addition to the Taiwanese factory has been commissioned to produce the volume due to the shortage in supply."
The Commercial Times reported, "CMMT recently raised the selling price of polarizers by 5 to 10% for its Chinese clients. And, in the second quarter of this year, the supply will be even tighter, making the price increases greater." Also, the newspaper said that "CMMT had taken the first step toward the rise of polarizer prices."
As Chinese panel makers, BOE and CSOT, started full-fledged production of their LCD production lines for over 10th generation last year, China's LCD panel production capacity has soared. As a result, recently, the possibility of rising prices for LCD polarizers in China has been raised. And the Taiwanese media reported on this industry reaction.
LG Chem Ltd., a major producer of polarizers, posted an operating loss last year in the information and electronic materials business sector, which includes the polarizer business. LG Chem said in a conference call in January that the loss was "due to the price decreases caused by the slowdown in the LCD panel market." The polarizer sales account for around 75% of LG Chem's information and electronic materials business.
"LG Display, the affiliate of LG Chem, is the largest customer, and the downstream industries have weakened due to the intensifying competition with Chinese companies," said LG Chem official. "We are diversifying our business into OLED polarizers and other materials," he added.
LG Chem built a polarizer factory in Guangzhou, Guangdong, China last year, and will start the factory operations this year. It is the second Chinese polarizer production line after Nanjing factory in Jiangsu province. An LG Chem official said, "the Guangzhou factory is a result of the considerations on the production capacity of OLED polarizers. And we can produce both in the same production facility." LG Display plans to start mass production at the large OLED panel production lines in Guangzhou City in the second half of this year.
Samsung SDI said in a conference call last January, "We expect polarizer demand to be strong in China until the first half of this year. We will increase the external portion (other than Samsung Display)." Among Samsung SDI's polarizer business, the sales to other panel makers such as those in China accounted for more than the sales to its affiliate Samsung Display.
Samsung SDI made its first overseas polarizer production line in Wuxi, Jiangsu Province in 2017. A Samsung SDI official said, "Currently, we are not expanding facilities at Wuxi factories. The market atmosphere may change in the second half of the year." Samsung Display is known to use products made by a Japanese materials company as polarizers for small-sized OLEDs. Samsung SDI is not currently producing OLED polarizers.
Many local companies in China have entered into the polarizer business. However, the Hangzhou Jinjiang Group has recently increased its production capacity. Hangzhou Jinjiang Group has entered into a technology partnership with Nitto Denko in Japan in 2017. The contract period is up to 5 years and the royalty fee is 15 billion yen (about 152 billion won).
At the time of the technical partnership agreement, Kunshan factory corporation Kunshan Zhimei Materials Technology Co., Ltd. of CCMMT and SAPO mentioned earlier were introduced as related companies. The total assets of Hangzhou Jinjiang Group as of the end of last year were close to 80 billion yuan (13.5 trillion won), and the sales exceeded 100 billion yuan (16.8 trillion won). Currently, the company is building a polarizer production line in Xian, Shaanxi Province, and signed a polarizer production contract with Guangzhou City in May last year.
The polarizer (or polarizing film) acts as a filter to filter out light from the LCD. The unpolarized light emitted by the backlight, which is the light source of the LCD, is filtered by the polarizer and becomes linearly polarized light that vibrates in a specific phase (direction).
The linearly polarized light passes through the liquid crystal and then reaches another polarizer. When the voltage is applied to the liquid crystal, the liquid crystal is twisted, through which the light is refined based on the operation principle of the LCD which adjusts the amount of light. There are two polarizers on the LCD panel and one on the OLED panel. The light passing through the OLED polarizer is circularly polarized rather than being linearly polarized.