The Challenges and Opportunities of China FPD Industry. Dr. Tieer Gu Tianma Micro-electronics. -Slide 1-

Similar documents
Nature and sustainability of the Chinese economy

2018 Interim Results Beat Expectations, Maintain "Buy"

Mining Could Bring Positive Surprise in 2017, Maintain Accumulate

Natural Gas Sales Growth to Accelerate, Maintain Buy

芯系天下 ( 線上法說會 ) Q Quarterly Online Investor Conference. March 15, March 3, 2016

QFII and Private Equity / Deals in China

1 欧美经济增长数据好于预期, 但次贷阴影远未消除, 美国经济衰退的可能性仍然较大 月初, 标准普尔下调了雷曼兄弟 美林和摩根士丹利三大华尔街投资银行的信用评级, 另外, 标普还将美美国银行 摩根大通的评级展望由稳定下调至负面

CAR Inc Annual Results. Feb 27 th, 2018

HOW TO DEVELOP A SUCCESSFUL JOINT-VENTURE IN CHINA. is a business unit of

COSCO SHIPPING Holdings Co., Ltd.

China s FTA Initiatives with Trading Partners Initiative ASEAN China FTA China Pakistan FTA Signed in 2006 China Chile FTA Signed in 2005 China New Ze

2016 Results above Expectations, Neutral

Crude Oil Price Outlook

Gas Sales Prospect Remains Bright, Maintain Buy

China s Challenge Towards To A High Income Society:

Ministry of Commerce (MOFCOM)

ORI for the 2 nd Quarter of 2015 概要 2015 年二季度末中国银行离岸人民币指数 (ORI) 为 1.37%, 较一季度末上升 0.1 个百分点

PROPOSAL. China Company Establishment

杠杆之殇. Bringing China to the World. New Energy Company Research. 下调 GCL New Energy (451HK) Market Data: Aug 29, 2018

环境险峻 京东集团 (JD:US) 中性维持. Bringing China to the World. Internet Software &Services Company Research

1H17 Results In Line, Accumulate

INVEST TO SUCCEED. INVEST TORONTO CCBC RECEPTION

Metal Prices Under Pressure, Maintain "Neutral"

2H18 Hong Kong TMT Sector Outlook

Earnings in 1H2018 Surprised, Upgrade to "Buy"

Monex Securities Schedule of Fees and Charges. Monex Brokerage Fees. Monex Securities Australia Pty Ltd AFSL No: ABN:

2017 Annual Results Beat Expectations, Maintain Accumulate

Analysis. ORI for the 3 rd Quarter of 2017 概要 2017 年三季度末中国银行离岸人民币指数 (ORI) 为 1.22%, 较上季度末微升 0.03 个百分点, 超出预测值 0.04 个百分点

Opportunities for Engagement

Literature Review on the Factors Influencing

Universal Social Protection

2018 年 9 月何治国 美国芝加哥大学布斯商学院金融学教授电话 : 电子邮件 个人主页 :

Sen Chettana 职业概况 求职意向 手机 : ****** 邮箱 : ****** 地址 : ****** 最近行业 : 工作年数 : 15 最近工资 ($): 1500

The Great Shakeup and Implications for Cross-Border M&As

加码高端物管市场维持彩生活买入评级 彩生活服务集团 (1778:HK) BUY Unchanged. Real Estate Company Research. Bringing China to the World

LECTURE 2 RISKS, ORGANIZATION AND STRUCTURE OF BANKING INDUSTRY IN CHINA. 9/27/2017 ACEM, SJTU, Nan Li

Results Need Time to Improve, Low Valuation, Maintain "Buy"

Account Maintenance Fee. USD 10 or equivalent per month for average account balance(s) less than USD 100,000 or equivalent. Account Maintenance Fee

National Development and Reform Commission (NDRC)

Media Announcement (For Immediate Release) 即时新闻发布. LionGold Corp Signs MOU with China SOE-backed Mining Contractor 瑞狮集团和中国国有企业背景的矿山工程承包商 签订合作备忘录

Analysis. ORI for the 2 nd Quarter of 2017 概要 2017 年二季度末中国银行离岸人民币指数 (ORI) 为 1.19%, 较上季度末微升 0.02 个百分点, 符合前期预测. Main Points

Income Inequality and An Economy in Transition

Staying the Course in a Changing China

CSE: LUX XETRA: NGO Frankfurt: NGO. Environmentally Responsible Gold Recovery

中国人民银行上海总部关于支持中国 ( 上海 ) 自由贸易试验区扩大人民币跨境使用的通知

Frequently Asked Questions On Fast Service

China Infrastructure Sector

Main Beneficiary of One Belt, One Road Initiative, Maintain Accumulate 一带一路 计划的主要受益者, 维持 收集. Profitability Undermined by Falling Wafer ASP, Neutral

Income Inequality and An Economy in Transition

Rapid Growth for 1Q18 Power Generation, "Accumulate" 2018 年 1 季度发电量维持高速增长, 收集

业绩符合预期 交行周四公布中报业绩 期末贷款余额同比增长 7.4%, 存款余额同比增长 4.9% 净息差同比下降 30 个基点至 1.97% 净利息收入同比下降 4.1%, 非利息收入同比增速达到 8.1% 上半年净利润达到 亿元, 基本每股收益 0.

Uncertain Domestic Demand in 2019, Maintain "Neutral"

Pay your ICBC Credit Cards Bills via FAST 通过 FAST 支付工银信用卡账单

New Innovations for Green Financing in Urban China. Thursday, July th Floor

Weak 1Q16 Results, Neutral 2016 年第一季业绩疲弱, 中性

Dagong Credit Flash. Chinese Property Industry Chinese Cities Credit Risk Ranking Update. Summary. Contacts

年报前瞻 中广核新能源 (1811:HK) Renewable Energy Company. Bringing China to the World

中国中铁 -H [390.HK] 中国建筑业 收盘价 : 7.19 港元 (2018 年 11 月 30 日 ) 目标价 : 8.30 港元 (+15.4%) 股价表现 (852)

全面进入 EMC 模式 同方泰德 (1206:HK) BUY. Technology Hardware & Equipment Company. Bringing China to the World. Unchanged

KONE CAPITAL MARKETS DAY 2012 Sustainable growth in China. William B. Johnson, Managing Director, KONE China June 8, 2012

Static on the line CHINA TELECOM (728:HK)

China s Fiscal Policy in the Post-Crisis Period DRC

Measures to Ease the Restrictions on Cross-border RMB Settlement of Goods Exports -Moves to remove the pilot enterprise system for goods exports-

Possible Effects from Slower Weibo User Growth, "Buy"

CAR Inc Annual Results. March 2016

The Yuan Exchange rate and Firms Atturo Giulia

CESC Index Report for September

PeopleSoft Global Payroll for China 9.1 Reports

PDF 文件使用 "pdffactory Pro" 试用版本创建

R&D tax incentives in the EU 欧盟的研发税收奖励

ACCA F3/FIA FFA. Provided by Academy of Professional Accounting (APA) Financial Accounting(FA) Financial Reporting ACCA Lecturer: Tom Liu

2015年度审计报告及财务报表 02 03

China and Canada eye more mutually beneficial trade deal 1

中国人民银行关于金融支持中国 ( 上海 ) 自由贸易试验区建设的意见

Session 4b China Health Insurance Industry A Ever Changing Landscape. Davout Yean, FSA

Benign Prospective Fundamentals with Strong Contracted Sales, Reiterate "Buy"

TPV TECHNOLOGY LIMITED

Sales Trend Remains Strong, Maintain Buy

Challenges and Resolutions in China s Labor Market

株洲南车时代电气 ( 3898.HK ) 中报业绩显示环比改善迹象

Profitability Improved Greatly; the Worst is Over

Chinese Bankers Survey 2011

Investment Opportunities of Shenzhen-Hong Kong Stock Connect (I)

China Economics. Macro Research. sense. Hence, there is still a long way to go for its yoy growth to turn positive. under the present situation.

经营稳健, 新并购落地. BUY Unchanged. Pharmaceuticals, Biotechnology & Life Company. Bringing China to the World. Analyst

Interest Rate Liberalization: the Soul of Financial Reform

China Economy: Making Economic Turnpoint a Reform Turnpoint

2nd Insurance Innovation Congress China 2017

FPD Overview. November 6 th, 2017 Gil Oron, Corporate Vice President

AN INTRODUCTION TO THE REGULATORY REGIME OF THE CHINA (SHANGHAI) PILOT FREE TRADE ZONE

Non-Acoustics will be the Main Driver in FY17, Buy 非声学产品将成为 2017 财年的主要驱动力, 买入

Weaker Monetization from New Games, "Buy"

Lee'S Pharm (950 HK) Company Research Company visit. 24 July 2014 Non rated HK$10.28

Grasping Certainties. ---Investment Strategy of the Hua an Fund for the 4th Quarter of 2009 on the Stock Market

Market Pressure Remains, Reiterate Neutral

TIANJIN ZHONG XIN PHARMACEUTICAL GROUP CORPORATION LIMITED (Company Registration No F) (Incorporated in People s Republic of China)

Outlook on the Chinese Economy. LI Xunlei October, 2015

China Pulse Check: Building Materials Sector

FINANCIAL STATEMENT AND RELATED ANNOUNCEMENT

Topics 演讲内容 瑞士投资环境介绍 瑞士和中国之间的贸易及投资 立足瑞士的好处 瑞士政府提供的服务. 1. Switzerland at a glance. 2. The Environment. 3. Switzerland for Business. 4.

Transcription:

The Challenges and Opportunities of China FPD Industry Dr. Tieer Gu Tianma Micro-electronics 1 -Slide 1-

天时 Text 地利 人和 Concept = Market Demand + Government Support + Integrated Value Chain 2 -Slide 2-

Contents Opportunities China macro-economy China development trends Increasing market demand Chinese government policy support Challenges Semiconductor / PV industry / TFT-LCD Integrated value chain (over capacity, technology, talent, financing) Thoughts and suggestions 3 -Slide 3-

China macro economy 2009 GDP growth Stimulated by moderately loose monetary policy and proactive fiscal policy, China s GDP showed V-type rebound. China s GDP reached 33.5 trillion yuan, up 8.7% from a year earlier. China s economy is transforming from recovery to expansion cycle 16 14 12 10 8 6 4 2 % GDP 增速 growth : 同比 7% 的增长底线 7% bottom line growth 01-03 01-09 02-03 source:wind 02-09 03-03 03-09 04-03 04-09 05-03 05-09 06-03 06-09 07-03 07-09 08-03 08-09 09-03 09-09 4 -Slide 4-

China macro economy Fixed assets investment is the key driver for 2009 GDP growth Consumer Spending Investment Export Contribution (%) Pull-up(%) Contribution (%) Pull-up(%) Contribution (%) 2000 65.1 5.5 22.4 1.9 12.5 1.0 2001 50.0 4.1 50.1 4.2-0.1 0.0 2002 43.6 4.0 48.8 4.4 7.6 0.7 2003 35.3 3.5 63.7 6.4 1.0 0.1 2004 38.7 3.9 55.3 5.6 6.0 0.6 2005 38.2 4.0 37.7 3.9 24.1 2.5 2006 38.7 4.5 42.0 4.9 19.3 2.2 2007 40.6 5.3 39.7 5.1 19.7 2.6 2008 45.7 4.1 45.1 4.1 9.2 0.8 2009 52.5 4.6 92.3 8-44.8-3.9 资料来源 :wind, 国家统计局, 江南金融研究所 Pull-up(%) 5 -Slide 5-

China macro economy Import & Export Imports and exports totaled US$2.2 trillion in 2009 External demand shrinked, domestic demand strengthened, trade surplus decreased Trade Surplus Export Import source:wind 6 -Slide 6-

China macro economy Domestic consumption Consumer confidence index recovered steadily, domestic consumption increased rapidly In spite of 8% decline in the global luxury goods consumption, the domestic luxury goods consumption had grown by 12% Throughout the year 13.64 million automobiles were sold, an increase of 46.2% Commodity housing sales amounted to 937 million square meters, 42.1% increase 120 Consumer Confidence Index 消费者信心指数 : 月消费者满意指数 : 月消费者预期指数 : 月 China has become the world's largest auto market 115 110 105 100 95 90 J-10 N-09 S-09 J-09 M-09 M-09 J-09 N-08 S-08 J-08 M-08 M-08 J-08 N-07 S-07 J-07 M-07 M-07 J-07 source:wind 7 -Slide 7-

China macro economy 2010 GDP growth Central government target 8% GDP is expected to grow by 9%-11% in 2010 GDP(%) CPI(%) 原预测 最新调整 原预测 最新调整 世界银行 8.7 9.5 3.7 IMF 9.0 10.0 摩根士丹利 10.0 11.0 2.0 3.2 汇丰银行 9.5 10.0 2.6 3.1 UBS 9.0 10.0 3.0 中国社科院 9.0 10.0 3.0 3.0 中国科学院 10.0 3.1 建设银行 9.5 3.0 江南证券 9.3 9.3 3.0 3.0 平均值 9.2 10.1 2.3 3.3 8 -Slide 8-

China macro economy 2010 China economy still face a very complex situation Transforming the pattern of economic development and optimizing economic structure Monetary stimulation policy exiting strategy and timing Bubble asset risk Inflation risk Risk for second bottom The foundation for global economic recovery remains weak Trade protectionism is clearly reasserting itself RMB appreciation? 9 -Slide 9-

China macro economy A few predictions in 2010 Central government will keep a proactive fiscal policy Controlling the quantity of money supply becomes a norm RMB exchange rate reform will happen ahead of interests rate raise Gov visible hands Market invisible hands 10 - Slide 10 -

China development trend- Regional economic development Regional economic development strategy Eliminate unbalance of regional development, formulate regional economic development strategy West China Development Strategy Central China Rising Strategy Northeast Revitalization Strategy 中部崛起战略 振兴东北战略 西部大开发战略 环渤海经济圈 长三角经济圈 11 - Slide 11 - 珠三角经济圈

China development trend - High-speed railway High-speed railway drive overall economic development in China Direct investment increase Drive growth of related industry Change people's way of life, bolster consumption High-speed railway construction in China will have more than 18,000 km, account for more than half of the total mileage of the world s highspeed China long-term development plan of high-speed railway 1 hrs 3 hrs 5 hrs 12 - Slide 12 -

China development trend -Urbanization development Urbanization development 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% China s urbanization rate is about 45%, there is still much room for source:wind improvement comparing with 70% of urbanization of developed countries. 1950 1960 1970 1980 1990 2000 2010 人均 GNI 按购买力平价 (PPP) 计算 GNI 城市化率 (%) China s Urbanization 全世界 7,448 9,206 49 低收入国家 649 1,860 30 中等收入国家 3,053 6,451 55 下中等收入国家 2,038 4,899 47 上中等收入国家 5,913 10,879 75 低收入和中等收入国家 1,997 4,436 44 东亚和太平洋地区 1,856 4,359 42 欧洲和中亚 4,815 9,791 64 拉丁美洲和加勒比地区 4,785 8,682 78 中东和北非 2,507 6,710 57 南亚 768 2,289 29 撒哈拉以南非洲 829 1,681 36 高收入国家 36,608 34,933 78 欧洲经济与货币联盟 34,307 31,181 73 中国 2,000 4,660 41 13 - Slide 13 -

China development trend-new rural area construction New rural area construction Increase farmers' income thru diverse channels Change rural village and consumer habits Home appliance going to countryside, expand rural consumption and improve the quality of rural life raise the maximum price limits to 7000RMB for home appliances sold, in the countryside 2009 Color TV sold in countryside The proportion of flat TV units:10k 6500K 70% 14 - Slide 14 -

China development trend- Income distribution reform Income distribution reform Gradually increase the portion of middle-income families Proportion of middle-income by 2009 Proportion of middle-income by 2020 High-income High-income 22% Middle-income 37%~38% Middle-income Low-income Low-income 15 - Slide 15 -

China LCD demand (2009Y) WW market :70M units China Domestic market :13.6M units Mobile phone WW market :1250M units China production volume:600m China Domestic market :160M WW market :160M units China Domestic market : 44 M units Automotive Monitor Notebook PC WW market :141M units China Domestic market :28M units LCD TV WW market :170M units China Domestic market :24M units 16 - Slide 16 -

China LCD TV market demand Lead the growth of LCD TV market LCD TV (M) '07 '08 '09F 50 China TV market Worldwide 79 104 141 13 % Growth 77% 32% 35% M units 25 2 28 37 LCD PDP China 9 13 28 26 1 CRT % Growth 87% 53% 109% 0 12 1 5 2008 2009E 2010F 17 - Slide 17 -

China NB market demand Phenomenal year over year growth Notebook (M) '07 '08 '09F 50 China notebook market Worldwide 109 146 170 2.5 % Growth 37% 34% 16% M units 25 24 16"+ 14-15.6" China 9 14 24 % Growth 350% 56% 71% 0 11 3 16 8 14 7-13.3" 2008 2009E 2010F 18 - Slide 18 -

China monitor market demand Good penetration Monitor (M) '07 '08 '09F 75 China LCD monitor market Worldwide 163 167 161 % Growth 23% 3% -3% China 28 32 44 M units 50 25 6 13 26 28 6.4 18 23 23"+ 20"-22" 15"-19" % Growth 47% 14% 38% 0 2008 2009E 2010F 19 - Slide 19 -

China cell phone market demand Driving force change from new subscription to replacement Cell phone (M) '07 '08 '09F Worldwide 1120 1300 1188 % Growth 10% 16% -8% China 223 334 404 % Growth 47% 49% 21% Source:isupply 2010 20 - Slide 20 -

China auto market demand Big boom in auto sales leads huge demand for auto displays (PND, after market, and before market) Unit : K sets '09 10 11 PND(GPS) 6,000 7,000 8,000 After Market 3,000 5,000 7,500 Total 9,000 12,000 15,500 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 After Market PND(GPS) '09 10 11 21 - Slide 21 -

Chinese government support Restructuring plan of ten key industries Feb 25, 2009,The State Council formulated a plan for restructuring ten key industries including steel, automobiles,, equipment manufacturing, and electronic& information technology The proportion of ten key industry by industrial added value The proportion of ten key industry by GDP Ten key industries 80% Ten key industries 1/3 Others 20% Others 2/3 22 - Slide 22 -

Chinese government support Electronic & IT industry revitalization plan February 18th, 2009, the State Council adopted the Electronic Information Industry Revitalization Plan IC technology advancement & capacity improvement Display industry upgrade TV industry transformation Next-generation telecommunication (TD-SCDMA) Digital TV promotion and supply chain construction Next-generation computation & internet application Software and information service, etc. 23 - Slide 23 -

Chinese government support Revitalization of TV industry Improve supply chain of FPD industry Guide the construction of approved TFT-LCD, PDP production lines Support key set makers on system technology, module integration technology development Encourage the key panel makers to lead the construction of key materials and components supply chain 24 - Slide 24 -

Chinese government support Local government policy More than 50 state-level Economic and Technological Development Zone enjoy preferential tax policies During period of the industry transformation, 16 development zones focus on FPD industry Existing FPD industry parks: Kunshan, Nanjing, Shanghai, Wuhan, Chengdu, Beijing, Suzhou, etc. 25 - Slide 25 -

Contents Opportunities China macro-economy China development trends Increasing market demand Chinese government policy support Challenges Semiconductor / PV industry / TFT-LCD Integrated value chain (over capacity, technology, talent, financing) Thoughts and suggestions 26 - Slide 26 -

Semiconductor, TFT, PV, and LED market 6000 5000 Unit:USD100million 4000 3000 2000 1000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 LED 48 57 66 79 94 103 112 131 138 光伏 PV 89 181 310 479 681 927 1181 1200 1240 TFT-LCD 911 920 745 854 1105 1167 1212 1254 1282 集成电路 IC 2556 2486 2196 2421 2623 2806 2852 2904 2943 IC 集成电路 TFT-LCD 光伏 PV LED Source:WSTS, Displaybank, DisplaySearch, BOEMRT 27 - Slide 27-27

China share Share 39% Solar Energy Share 5% TFT LCD Share below 10% Semiconductor 1995 2000 2010 2015 2020 28 - Slide 28 -

What can we learn? Semiconductor PV TFT LCD Start Time Investment (USD$) Late 90 ~2003 2003 2500M(12 ) 400M(1GW) 3500M (8.5G) Business model IDM Foundry/DH Manufacture IDM+VA Product character Customized+ Commodity Commodity Customized+ Commodity Value chain (Raw material to end product) Narrow Narrow Wide range of components Process difficulty Equipment evolution High low medium Medium Low Fast 29 - Slide 29 -

Fragmented value chain supply side Korea Japan Taiwan China Equipment Partial Complete Partial Lack Glass CF Complete Complete Complete Complete Complete Complete Lack Under construction LC Partial Complete Partial Partial Polarizer Complete Complete Complete Lack Backlight Complete High End Complete Middle-Low end LED Complete High End Complete Low end Optical film Complete Complete Complete Low end FPC IC Complete Complete High End High End Complete Complete Middle-Low end Partial 30 - Slide 30 -

The revolution of FPD investment in China Mobile phone market driving TV market driving 8.5/7.5G 10G?? 4.5G OLED /E-PAPER G5 /G6 2000 2005 2010 2015 2020 31 - Slide 31 -

China LCD fabs Chengdu: BOE-B2 G4.5, Chengdu Tianma G4.5, Foxconn G8.5 Wuhan: Wuhan Tianma G4.5 Beijing: BOE-B1 G5, BOE-B4 G8 Hefei: BOE-B3 G6, BOE-B5 G8 Suzhou: Samsung G7.5 Kunshan: IVO G5, AUO G7.5 Nanjing: CEC-Panda G6, CEC-Sharp G8 Shanghai: Shanghai Tianma G5, G4.5 Guangzhou: LGD G8.5 Shenzhen: Century G5, Huaxing (TCL) G8.5 32 - Slide 32 -

China LCD fabs BOE-B1 BOE-B4 BOE-B3 BOE-B2 BOE-B5 InfoVision (IVO) Tianma CEC Panda Tianma Tianma Tianma Century CEC-Sharp LG Display Samsung Hua Xing (TCL) AUO Location Investment Gen. Capacity Status Exp. Date Bei Jing 1.34 B USD G 5 100k sheet/m Mass Production Q1, 2005 Bei Jing 28 B RMB G 8 90k Construction Q4, 2011 He Fei 17.5 B RMB G 6 90k Construction Q4, 2010 Cheng Du 3.1 B RMB G 4.5 30k Mass Production Q4, 2009 He Fei 28 B RMB G 8 90k Planning? Kun Shan Shang Hai 0.7+0.87 B USD 5+3 B RMB G 5 G 5 110k 90k Mass Production Mass Production Q3, 2006 Q3, 2004 Nan Jing Shang Hai Wu Han Cheng Du Shen Zhen 13.8 B RMB 3.3 B RMB 4 B RMB 3 B RMB 1.5 B USD G 6 G 4.5 G 4.5 G 4.5 G 5 60+20k 30k 30k 30k 60+30k Construction Mass Production Construction Construction Mass Production Q1, 2011 Q1, 2008 Q?, 2010 Q1, 2010 Q2, 2009 Nan Jing 30 B RMB G 8 90k Planning Q4, 2012 Guang Zhou 4 B USD G 8.5 60+60k Planning Q2, 2012 Su Zhou 2.3 B USD G 7.5 110k Planning Q3, 2012 Shen Zhen 24.5 B RMB G 8.5 100k Construction Q1, 2012 Kun Shan 3 B USD G 7.5 90k Planning Q4, 2011 33 - Slide 33 -

Over capacity Not now! Government visible hand!!! Birth control Who will be born? 34 - Slide 34 -

Technology & IP risk Exchange market for technology Import digest absorb renovation Self-innovation Self innovation Cross license Patent License Tech transfer Acquisition Self innovation Tech transfer Future Now 35 - Slide 35 -

Technology & IP risk Large display IPS/MVA/3D Small/medium display IPS/MVA/LTPS/Transflective/AMOLED/E-paper 36 - Slide 36 -

Talent shortage 2009 college graduates 6 million students FPD panel makers needs > 10,000 engineers Currently staffing < 4,000 engineers <3~5yrs related working experience (not many turn over from IC) Retention is a big issue High cost of introducing oversea talents, C&B for local talent in 1st tier city increase significantly Huge gap in leadership Company culture needs more time to develop 37 - Slide 37 -

Financing channel Major financing channels Profit reinvestment Stock market Bond market Bank Loan Government investment arms Financial support (by central and local government) Registered capital 40% Project reinvestment 0% Bond market 0% Stock market 20%~30% Gov. investment arms 10%-20% Bank loan 60% Total 100% 38 - Slide 38 -

Contents Opportunities China macro-economy situation China development trends Increasing market demand Chinese government policy support Challenges Semiconductor vs. TFT-LCD vs. PV industry Integrated value chain (over capacity, technology, talent, financing) Thoughts and suggestions 39 - Slide 39 -

Industry Balance growth and profitability Build an integrated supply chain and establish economic scales through partnership and integration Align market strategy with technology strategy & fab investment strategy Invest in technology and people 40 - Slide 40 -

Government Macro control on over-investment ( birth control policy) Financial support on Taxation R&D Promote cooperation among industry, academy & university Facilitate new financing channels 41 - Slide 41 -

Thank you! 42 - Slide 42 -