Thursday, March 26, 2009

When Industries Explode into Revolutions

I have always wondered how technical (not scientific) revolutions come about and join with market forces to create a bonanza of activity in a particular industry.

We have seen it happen with Java in the Software and Internet industries.

Now, we are witnessing similar processes in other industries.

Take the case of flat panel displays. This is a case where consumer demand, technology, globalization and bold planning are meeting to create fantastic industrial giants.

Here are some interesting facts from a recent Wall Street Journal article by Evan Ramstad.

  • AU Optronics Corp. is the third largest producer of flat-panel, LCD screens after Samsung Electronics Co. and LG Philips LCD of South Korea. AU is pouring $2.3 billion in a factory to be built in Taiwan. To shorten the construction time for the factory by 40 days, they paid $500,000 to have a 210-ton machine delivered from its manufacturer in a Soviet-built, six-engine Antonov 225 plane. It was the only plane large enough to carry the machine to its destination. The machine was built in Germany by Applied Films Corp., a U.S. firm that specializes in glass and metal coatings.

  • Revenues in flat-panels is going to increase to $60 billion this year, 40% above last year.

  • Ordinary TVs cost manufacturers less than $5 / sq. inch of screen size. LCD's cost $20 to $30 / sq. inch of screen size. Plasma screens cost around $20 / sq. inch.

  • Most of the research and development for flat panel screens is now being done in the Asian countries where the manufacturers are based: Korea, Taiwan, China and Japan.

  • Here's a couple of very interesting paragraphs from the WSJ story:

The company [AU] has built each of its five latest plants faster than the previous one. It's now pushing its contractors to the limit: AU's new factory has 2.4 million square feet of clean room, where manufacturing takes place, compared with 500,000 square feet at Intel Corp.'s largest chip-manufacturing plant. Handed a deadline of just seven months, general contractor Fu Tsu Construction Co. began construction late last year even before the plant's architects were done. "When we are still working on the first floor, they are still designing the second floor," says Lin Chih-sheng, a Fu Tsu director.

Fu Tsu lined up three sources of steel because the project consumed 140,000 tons of it. That's nearly twice as much of it as Taipei 101, the world's tallest skyscraper that opened last year in the capital city. The plant and other flat-screen facilities being built in Taiwan began consuming so much concrete that a sand shortage arose.

Now, there's an industry exploding into a revolution ! ! !

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