Polarizer makers BenQ Materials and Cheng Mei Materials Technology (CMMT) have obtained orders with shipments scheduled until the end of June 2022, according to the companies.
Compensation films, a material of polarizers, are in short supply currently because Japan-based makers have not expanded production capacities, BenQ Material chairman Chen Chien-chi said. The shortage has led to hikes in compensation film price, but the negative impact has been offset by depreciation of the Japanese yen and new Taiwan dollar against US dollar, Chen noted.
Global demand for notebooks in 2022 tends to decrease on year, but BenQ Materials will not be substantially impacted because only a small proportion of its polarizers are used in IT-use panels, Chen indicated.
BenQ Materials also produces medical/healthcare products and separator films used in electric vehicle (EV) lithium batteries.
While COVID lockdowns in some Chinese cities have reduced demand for medical/healthcare products in China, demand in Taiwan and Southeast Asia remains robust and BenQ's hemostatic products have been exported to East Europe, Chen said.
Separator film is in short supply currently and global demand is expected to hike eightfold to tenfold in 10 years, Chen noted. Despite the high growth, barriers for newcomers are high as well because procurement of manufacturing equipment will take at least two years, R&D will take three yeas and clients will take two years in product certification, Chen indicated. If a new competitor starts now, it will not come up with its separator films until 5-6 years later at least, Chen added.
BenQ Materials expects the revenue proportion for polarizers to drop to below 80% in the second or third quarter of 2022, Chen said.
Japan-based suppliers hiked quotes for compensation film in April 2022 and CMMT, viewing that LCD panel makers have suffered continued price drops, has absorbed such increases and not hiked quotes for polarizers, according to company president Lo Lai-hwang.
Second-quarter 2022 gross margin and operating profit margin are likely to rise sequentially, but orders to be received in the third quarter are expected to decrease sequentially by less than 10% due to impact of inflation, Russia-Ukraine war and China's lockdowns, Lo indicated.
CMMT has been making efforts to increase shipments of polarizers used in LCD panels of high-end notebooks and automotive displays as well as OLED panels, Lo noted. CMMT has shipped such polarizers to OLED panel makers for Japan-based smartphone vendors and has been in talks with China-based OLED panel makers, Lo said.
CMMT stands a chance of obtaining orders for such polarizers from China- and Japan-based makers of automotive displays in the second half of 2022, Lo indicated, adding that the revenue proportion for such polarizers is likely to rise from below 3% in 2021 to 15% in the fourth quarter of 2022.
Currently, Taiwan-based panel maker Innolux and Japan-based Sakai Display Products are the two largest clients for CMMT, accounting for about 40% and about 20% of CMMT's consolidated revenues.
