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[Display Dynamics] TFT-LCD chemical materials market remains robust on growth of Chinese panel makers - Part 1: 4 Key TFT materials

November 09, 2014

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Key findings

  • Markets for the four key chemical materials - photoresist, etchant, stripper and developer - that are used to manufacture TFT arrays are expected to remain robust on the growth of the LCD market.
  • Photoresist: Demand in volume will increase but that in value will grow marginally  
  • Etchant: As higher resolution displays are demanded more, the application of Cu electrodes is expected to expand, which will lead to a boost in the use of Cu etchants. 
  • Stripper: The market growth rate will be decided by whether or not water-based stripper demand will increase.
  • Developer: Not big market changes are expected. 


Market forecast of major chemical materials used in TFT-LCD process

Markets for the four core chemical materials—photoresist, etchant, stripper and developer—that are used to manufacture TFT arrays are expected to remain robust on the growth of the LCD market. LCD process development has been almost completed with no further innovations expected. Thus, it is safe to say the industry doesn’t contain many variables in terms of changes in the market trends. Yet, in line with the growth in the Chinese LCD industry, this is becoming an opportunity for the companies within the supply chain.

The combined market of the four chemical materials used in TFT array fabrication is estimated at $1.27 billion in 2014, and expected to grow to $1.32 billion by 2019. The market for etchant, the largest among the four, is forecast to post $490 million in 2014.


Limited growth expected for photoresist market  

The photoresist is mainly used in the electronics industry and its demand is high from the semiconductor and LCD sectors, whose major process requires photolithography. Major organic photosensitive material makers, which entered the photoresist market from the very beginning, are leading the photoresist supply. They include JSR, Tokyo Ohka Kogyo Co. (TOK), Dow Chemical Co. (formerly Rohm and Haas Co.), Shin-Etsu Chemical Co., Sumitomo Chemical Co., and AZ Electronic Materials Plc (AZEM). In particularly, all major photoresist suppliers run their businesses in South Korea where the world’s top LCD and semiconductor makers are based. Photoresist suppliers to LCD producers include Dongjin Semichem Co., AZEM, and TOK. Except for TOK, the rest have a negligible presence in the semiconductor industry.

In 2014, the LCD-use photoresist market is estimated at 22,000 tons, valued about $300 million. It will make a steady growth to 27,000 tons by 2019, but due to the fall in prices, the revenue market will remain flat or slid to $290 million. Photoresist is an indispensable material for the LCD industry and is expected to grow steadily as long as the LCD market continues to grow.


Cu etchant to expand in etchant market

The etchant is used when etching metals (or oxides), a process required in the photolithography to pattern electrodes. In general, specific etchant makers supply LCD-use etchants to each panel maker. Major etchant suppliers include BASF SE, Dongwoo Fine-Chem Co., Soulbrain Co., Mitsubishi Gas Chemical Company Inc., and Dongjin Semichem.

Most of the etching that is performed in the LCD industry is wet etching and a huge amount of etchants are used there. In fact, the LCD industry consumes the most etchants of all electronics industries. The LCD industry mostly uses etchants based on phosphoric acid or hydrogen peroxide. Beginning two to three years ago, Samsung Display Co. has used non-hydrogen peroxide etchants for copper (Cu) metal etching, which as a result surged the consumption of nitric-based etchants. With the higher resolution of panels, the use of Cu metal, whose electrode resistance is low, has increased. In turn, the consumption of Mo/Al metal dropped. This resulted in a plunge in the use of phosphoric acid-based etchants.

The LCD-use etchant market is on a steady growth. The annual consumption of the etchant is estimated at 650,000 tons, valued $480 million, in 2014. The consumption will increase, but the revenue market decline due to a fall in prices. The etchant consumption is expected to grow steady to 800,000 tons by 2019, up 20% from 2014, and the revenue market will amount to $500 million, similar to the 2014 level, due to the price drop. 


Application of water-based stripper, key to market growth

The stripper is used to exfoliate photoresist left in the photolithography process. Like etchant and photoresist, stripper is used in various sectors of the electronics industry and is widely employed in the semiconductors and LCD industries in particular. Strippers are divided into oil- and water-based products. Until the late 2000s, the oil-based strippers were mainly used but since 2010, water-based strippers have been increasingly adopted. Water-based materials are more environmentally friendly than oil-based ones and relatively cheaper. Thus, they will be growing in demand.

Stripper suppliers to LCD makers include Mallinckrodt Baker Inc. (MBI), LTC, Dongjin Semichem, LG Chem Co., AZEM, TOK, and Sumitomo Chemical. MBI had almost dominated the market with the oil-based PRS2000 until the late 2000s, but is now squeezed out in the market as it lost price competitiveness.

Demand from the LCD industry for strippers has been steadily expanding in line with the growth in the LCD sector. The annual consumption of strippers is estimated at 250,000 tons, worth $350 million, for the entire 2014. The figures will grow steady to 300,000 tons, worth $390 million, by 2019. Except for technical issues for each customer, the growing adoption of water-based strippers is one big stripper-related issue in the LCD industry. Depending on the increase in water-based stripper demand, there will be a big change in the stripper market size (particularly in terms of revenue). 


With limited suppliers, no big changes expected in developer market

The developer is a liquid organic photo sensitive material, used in developing photo resistor, which was applied in the manufacturing process of the semiconductors and TFT-LCD, after exposing it to the light using the lithography equipment. The only developer currently used for positive photoresist to produce semiconductors and TFT-LCD is tetramethyl ammonium hydroxide (TMAH). The TMAH is produced by reaction of trimethylamine and mthyl chloride. Usually, TMAH 20% or 25% aqueous solution is supplied and used after being diluted to 2.38% and added with surfactant. 

Developer suppliers include South Korea-based Hantok Chemicals Co. and Nepes Corp.; Japan-based Tokuyama Corporation; Taiwan-based San Fu Chemical Co.; the US-based Moses Lake Industries Inc.; and China-based Hangzhou Greenda Chemical Co. The number of developer suppliers is limited in each region, so their market shares depend on the demand from the panel makers in the region. Hantok, Nepes, Greenda, and Moses are supplying the developer to South Korea, the largest consumer.

Demand for developer from the TFT-LCD industry is growing along with the growth of the LCD industry. The market is estimated to reach 99,000 tons in volume, or $130 million in value, in 2014. The developer market, whose steady growth is expected along with the growth in the TFT-LCD industry, will post 124,000 tons in volume or $140 million by 2019. 



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