Seven Taiwan-based equipment makers including Mirle Automation, Gallant Precision Machining (GPM), Hiwin Mikrosystem, C Sun MFG, Usun Technology, Mactech and E-sun Precision Industrial today formed an alliance to jointly develop TFT LCD equipment for large-size LCD panel production.

The seven companies will integrate their technologies (both vertically and horizontally) and collaborate on developing new equipment for the TFT LCD panel industry.

The average annual investment for Taiwan's TFT LCD equipment industry is about NT$140 billion and the self sufficiency rate in 2005 was only 22%, said Woody T. J. Duh, director general, Department of Industrial Technology, Ministry of Economic Affairs (MOEA). However, he added, with more next-generation plants coming online over the next few years, demand for LCD equipment will increase.

Duh also said that the production value of Taiwan's flat panel market probably exceeded NT$1 trillion in 2006 and the LCD equipment industry will be the key point for Taiwan to next reach the NT$2 trillion level.

Nevertheless, leading TFT LCD panel makers including Samsung Electronics, LG..Philips, AU Optronics (AUO) and Chi Mei Optoelectronics (CMO) are cutting their capital expenditure (capex) for 2007. In response, Hong Sun, chairman of Mirle Automation, stated that panel makers are still expanding their LCD module (LCM) plants in China, so Taiwan's LCD equipment market will continue growing. Taiwan's self sufficiency rate will reach to 40% in 2007 and achieve 50% in 2008, Sun estimated.

Sun also said he is not pessimistic about the TFT LCD outlook for 2007, adding that starting from the second quarter, the LCD industry will rebound and this will benefit most Taiwan equipment makers.