The biggest reason is that demand for polarizer, in terms of area, is forecast to grow at a compound annual growth rate (CAGR) of 7%, but the supply is expected to grow only at a CAGR of 2% due to a lack of new operating lines.

Another issue is tariffs from China. China has hiked tariffs on polarizers to 8% this year and it may hike them again to 11% next year. Such a tariff increase means polarizers will lose price competitiveness.

China-based panel makers will also likely depend more on polarizer supplies in China rather than importing them. But supplies in China absurdly fall short of meeting the panel demand in China.

LG Chem Ltd., which already built a new line in China, and Chi Mei Materials Technology Corp. (CMMT) are expected to greatly benefit from the rise in panel demand in China. (See p.60.) In this context, Nitto Denko Corp. and China’s Shenzhen SAPO Photoelectric Co. (SAPO) are believed to have reached a business pact.

In addition, the outlook for the 2014 panel market is bullish. By value, the polarizer market is estimated to increase by 5.3% in 2014 compared to a year ago to $10.3 billion. It is also forecast to rise 5.4% in 2015. In terms of area, the market is forecast to grow at a CAGR of 7.5% from about 400 million square meters in 2014, to exceed 500 million square meters in 2018.