FujiFilm: Monopolistic TAC Price Resilience

On October 30, FujiFilm Holdings stated that prices of its triacetate cellulose films have not been affected by dropping prices for LCDs. FujiFilm has an 80% market share of TAC films that are used in nearly all LCD panels to protect the polarizers. The company opened up a new TAC film factory in Kyushu, an island on the southern tip of Japan. FujiFilm is transitioning away from the traditional film industry and is now focusing on LCD materials that allow fo very high margins. FujiFilm has invested 100 billion yen (about US$938 million) to construct six lines at its Kyushu factory. The company’s TAC film annual production capacity will double to 580 million m2 or 6.24 billion sq. ft. by August 2008. Currently, FujiFilm has a capacity of 280 million m2 or 3.0 billion sq. ft. representing 80% of the market. FujiFilm and Konica Minolta Holdings are the only major suppliers of TAC film.

I am looking forward to $999 42″ LCD TVs with 1920 x 1080 resolution powered by a LED backlight that generates about a 100% NSTC color gamut. But there is a limiter that is preventing that from happening and it seems to be FujiFilm with no price drops for its TAC films. LCD manufacturers will pour millions into R&D to get away from their dependency on FujiFilm and Konica Minolta Holdings to continue to reduce pricing for their LCDs. I hope they succeed and very soon.

Source: Reuters

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