The Supply Chain Study and Profit Pattern Analysis of Taiwan and Korea TFT-LCD Industry

• Main Authors: Jia-Ming Liu, 劉佳明
• Other Authors: Anthony F. Han
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/96456465739628003032

碩士 === 國立交通大學 === 管理學院高階主管管理碩士學程 === 96 === Taiwan and Korea are two major countries supplying large size TFT-LCD to the global market. Manufacturers of AUO, CMO, Samsung and LGD together account for more than eighty percent of the global market. Using these four big companies as cases, this paper analyzed the similarities and differences of the TFT-LCD supply chain structures in Taiwan and Korea, and explored the profit patterns and competitive strategies of the four companies in the global market. Analyzing the supply chain structures of the TFT-LCD industry, we found that the industry is about to reach its maturity. Except for the product lines of home TV and public displays, most TFT-LCD products are facing a saturated market. Comparison of the supply chains in the two countries showed that Korea is slightly better than Taiwan in the integration power of the supply chain. However, both countries are lack of sufficient support of some upstream key-materials suppliers. Due to the industrial technology of TFT-LCD is almost mature, companies in this industry are basically in the low or no profit zone of the Mega patterns relying on big volumes. Based on the profit pattern analysis, we found that the four case companies each has developed its strategies to fight back to the profit zones using different profit patterns and approaches. In Taiwan, AUO adopts a supplier concentration pattern by merging ADT, UNIPAC and QDI to maintain its lead in the market. AUO also integrates the upstream materials suppliers to achieve complementary concentration patterns. The company recently moves to knowledge patterns and supply chain patterns by positioning itself as a major supplier of LED backlight embedded LCD products. The other company, CMO, adopts a supply chain reintegration pattern by setting up CMO-owned suppliers from materials, IC driver to equipment in the whole supply chain. CMO also focuses on the technology differentiation and tries to get higher profit margin through the development of new products and brand image such as Polyvision. In Korea, Samsung emphasizes organization profit patterns by cooperating with world-class suppliers like Corning, Sony, and Sumitomo Chemicals. Samsung thus takes the lead in the G-7 production line, and enjoys a higher and stable profit margin than others in the industry. On the other hand, LGD is more based on complementary concentration patterns. Nevertheless, LGD attends to the development of new next generation products such as the roll-to-roll printable display. This is a “from product to blockbuster” profit pattern on which LGD relies to maintain its lead in the industry. In summary, companies in a rather matured industry, such as TFT-LCD, are in fierce competition with low or no profit margins. Only those companies can develop successful back-to-profit strategies will survive. The different back-to-profit approaches of the four case companies that we discovered in this research may provide good lessons to managers in both the TFT-LCD industry and other industries alike.