China’s FPD capacity has grown at a compound annual growth rate (CAGR) of 51% over the past five years. In 2010, China accounted for less than 4% of capacity. However, the expansion of large LCD fabrication plants (fabs) is forecast to push China’s share of global capacity to more than 21% in 2015.

Until recently, almost all FPD equipment spending focused on a-Si TFT (amorphous silicon thin film transistor) LCD fabs, mainly for monitor and television production. Now, Chinese FPD makers are rapidly attempting to diversify into the production of high-end, high-growth LTPS (low temperature polysilicon) TFT LCDs and AMOLEDs for smartphone and tablet PC applications.

“Lately there has been a surge in Chinese makers’ plans to increase LTPS capacity for both LCD and AMOLED applications,” said Charles Annis, vice president of manufacturing research at NPD DisplaySearch.

“There are now 10 potential LTPS investments expected in China in 2014 and 2015, with even more expected in the years to follow. Over the past several months, BOE, China Star, Truly, and AUO have all come forward with new LTPS fab plans.”

Now that a-Si TFT LCDs are produced in very high volumes in China, concerns about commoditization are rising. Panel makers are beginning to perceive high-performance LTPS TFT LCDs and AMOLEDs as offering higher, more sustainable profits than a-Si TFT LCDs.

At the same time, local governments, hoping to attract industries with the most advanced manufacturing technologies to their regions, continue to finance fabs by creating joint ventures with panel makers and provide a variety of other incentives. These factors are now driving unprecedented interest in new LTPS fabs.

“It remains to be seen how many of these ambitious fab plans actually come to fruition,” Annis said.

“There are already several LTPS fabs in China, but so far commercial production has been negligible. LTPS production remains technically challenging, and it is even more so when applied to AMOLED manufacturing. As with a-Si TFT LCDs, eventually Chinese makers will likely move up the LTPS learning curve and become competitive. It just may take longer than some companies hope for, and some companies may not make it at all.”