Taiwanese TFT industry facing fights started by Japanese and Korean enterprises over patent rights

The position of Taiwanese TFT industry in the global market has become more and more important. As a result, the industry has recently received written notices from foreign enterprises including Japanese Sharp, Hitachi and South Korean L.G. Philips LCD indicating that the local manufacturers have infringed on their TFT-related patents.  In case that the actions to be filed formally by these foreign manufacturers are established, the TFT manufacturers of this country will face the loss resulted from paying high royalties.  This situation will add a variable to the industry’s future development.

As far as it is concerned, TTLA, organized by local manufacturers to deal with the problem about the foreign manufacturers’ successively accused infringement against Taiwanese manufacturers, hopes to unite the power of local manufacturers to jointly resist the fights over TFT-related patent rights, which will certainly become more violent in the future. Local manufacturers pointed out that Japanese Sharp had sent letters with regard to infringement of its TFT-related patents to all of the local TFT manufacturers (except Quanta Display Incorporation which has technical transfer cooperation with Sharp). South Korean LG. Philips LCD had sent similar warnings to Chi Mei Electronic Corp. and other manufacturers.  As to Hitachi which doesn’t have technical transfer cooperation with any of Taiwanese TFT manufacturers, it also started issuing the relevant notices.

Speaking of the fact that there are thousands of patents relating to TFT panels, Taiwanese manufacturers are lagging behind with regard to the control of the TFT-related patents as compared with Japanese and South Korean manufacturers.  Competitors didn’t take it seriously when the scale of Taiwanese manufacturers was small.  However, now the global market share of Taiwanese TFT will soon exceed 30 percent.  The output value of 2001 exceeds 80 billion NT dollars and it will further reach 200 billion to 240 billion NT dollars in 2002 and 2003.  As Taiwan ranks 2^nd of the global market share, it naturally becomes the target of the competitors.  In accordance with the relevant international customary practice, patent license or payment of royalty is usually based on 3% of the ex-factory price of the product at issue. Under the circumstances, the potential loss of Taiwanese manufacturers will reach the scale of several billion or even tens of billion NT dollars.