Global Photonics Market and the Photonics Industry in Taiwan

According to the statistics of PIDA, the estimated value of the global photonics market in 2004 will reach US$ 203 billion (production value), a growth of 15% as compared to that of 2003. In the past few years, the average growth rate of the global photonics market was about 10%. The growth rate in 2004 is higher than the average growth rate, which means that the global economic condition is slightly better than that of the past few years.
The photonics technology and its applications include 6 fields/categories: (1) OE components (2) FPD (3) optical input/output devices (4) optical storage (5) optical fiber communication (OFC) (6) optical components and laser applications. In 2004, the ¡§OE components¡¨ field and the ¡§FPD¡¨ field registered growths of 26% and 41%, respectively; these two fields have been showing the highest growth in the past few years. In terms of the market share of the global photonics market of 2004, the market value of FPD (including LCD, PDP and OLED and projectors) has been growing steadily and comprises 30% of the global photonics market in 2004.
In 2004, the production value of the photonics industry of Taiwan keeps growing and reaches USDT$ 27.3 billion, a growth of 39% compared to USD$ 19.6 billion of 2003. Please see the following table.
Similar to the global photonics market, in the 2004 photonics market of Taiwan, OE components, FPD and Optical Components and Laser applications show healthy growth. Particularly, in the past few years, the TFT-LCD industry has become the driving force of the photonics market of Taiwan. The market value of OE components showed a growth for the past three years thanks to backlight applications. The market value of Optical Components enjoyed a large growth in 2004 due to the increased demands for digital still cameras and camera phones.
It is noteworthy that the production value of Taiwan¡¦s photonics market in 2005 will reach NT$ 1 trillion ($30 Billion USD), which will be another milestone for the industry. Please refer to the following figure.
 

 

Table 1¡@Production Value of Taiwan Photonics Industry

Unit: US$ 1 million
 
2003
2004
2005
2006
2007
Output Value
Output Value
Growth
Output Value
Growth
Output Value
Growth
OE components
1,102
1,530
39%
1,985
30%
2,500
3,099
FPD
10,144
16,369
61%
18,898
15%
22,302
26,092
Optical input/output devices
1,980
2,120
7%
2,572
21%
2,833
2,928
Optical storage
5,695
6,349
11%
7,182
13%
7,957
8,342
OFC
250
283
13%
332
18%
405
477
Optical components and laser applications
453
645
42%
857
33%
1,100
1,312
Total
19,625
27,297
39%
31,827
17%
37,099
42,250


Source: PIDA, 004

 



 

Figure 1¡@Trends of the production value of Taiwan¡¦s photonics industry
from 2003 to 2007

Unit: US$ 1 million

Source: PIDA, 2004




The production value of photonics industry in Taiwan increases along with the expansion of the global photonics market and comprises 13% of the global photonics market. Taiwan ranks within the top three countries in the world with respect to the global market shares of the products including LED packaging, STN/TFT-LCD, CD/DVD drive and disc, digital still camera and OLED.
 

Figure 2¡@Worldwide Top 3 Photonics Products

Source:PIDA





 






As FPD manufacturers establish the 5th generation TFT-LCD production lines, the key competitive advantages of the industry have shifted from technological capability and mass-production to capital-intensive investment mode. In the future, companies in the industry may want to establish their own brand and try to market such brand. In the future, to the photonics industry of Taiwan, the important competitive factors will be technological capability, mass-production, capital and the establishment of a brand name and its marketing.There have been difficulties, hurdles and challenges in the photonics industry of Taiwan in the past 20 years. These difficulties and challenges included (1) Many companies in the industry jumped on the bandwagon by engaging in the manufacturing of lucrative products, and this prompted the vicious cycle of price-slashing war and the reduction of profit margin; (2) Many companies had to shift their production lines to China because the market reached a saturated level; (3) Many companies had to depend on foreign companies for necessary technologies, key components/assemblies and patents; (4) The global economic condition has been quite sluggish from 2000 till now. Fortunately, the companies in the industry have been able to overcome or deal with all the adversities and difficulties and generate more income so that Taiwan may become an important country in the global photonics supply chain.