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Growth momentum is expected to come mainly from the additional production capacity of several new G8.5 lines, including the maximum level of production capacity expansion of Chinese panel makers BOE and CSOT. As of the second quarter of 2014, BOE had the maximum panel capacity of 110K per month. CSOT is expected to see the maximum capacity jump to 130K per month from the second half of 2014.
Meanwhile, situated respectively at Suzhou and Guangzhou, G8.5 lines of Korean Samsung Display and LGD have begun volume production. LGD's G8.5 line, though slower in production, has been catching up fast and churning out panels at a speed faster than Samsung Display. Both G8.5 lines are forecast to reach maximum of 50K per month by the end of 2014. Whether they will further expand their production capacity depends highly on the end-market demand.
Owing to the increased demand for small and medium area panels and the growing trend of bigger screen products, panel makers' panel production schedule has been adjusting toward higher generation technologies. Given the fixed capacity, they tend to increase production capacity of existing lines instead.
Taiwanese panel maker AUO has shifted production capacity at L5D away to small and medium area panel applications such as smartphones and consumer electronic devices since the second quarter of 2014. Beginning in the fourth quarter of 2014, AUO will only reserve limited panel production capacity for large area panel applications. Another panel maker Innolux also has allocated the notebook PC panel production.
But now panel makers are modifying their production schedule to reduce notebook PC panel production, thereby affecting the supply. CPT (Chunghwa Picture Tubes) and Hannstar have been placing focus on small and medium area panel applications as well. CPT has terminated its large area panel production in the first quarter of 2014 and Hannstar plans to follow suit in the first quarter of 2015.
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