War of glass

“War of glass” for smartphone touch screens is intensifying.

Core parts for the touch screen, which smartphone users come into contact most frequently on the digital device, have been effectively monopolized by two companies thus far. Corning of the U.S. controls about 90 percent of the global tempered glass market, and Nitto Denko of Japan takes up 67 percent of the market for indium tin oxide (ITO), which is attached onto the tempered glass. Since it virtually impossible to produce quality smartphones, leading smartphone manufacturers including Samsung Electronics, LG Electronics and Apple have been highly dependent on these two players.

The two companies have been dominating the market due to high technological barriers. ITO film from Nitto Denko is a transparent product that is created by applying fine particles of indium and tin onto synthetic film. The key to this technology is how finely the minerals are grinded and how evenly and transparently they are applied onto the film. Nitto Denko is by far the best in this technology in the world. A source at the smartphone industry said, “When the manufacturer receives supply of touch screen modules, it even demands the module supplier to only use film from Nitto Denko.”

Korean companies are jumping into this market in recent months. This phenomenon comes as Korean smartphone manufacturers have failed to secure adequate supply of parts due to insufficient indium supply and growing orders from Apple.

Since first producing ITO film in December last year, LG Chem increased its max output of the product to 300,000 sq. meters per month as of June this year. The production lags behind Nitto Denko’s (amounting to 12 million sq. meters last year), but the Korean company judges the market has huge growth potential amid rising demand.

Many companies are also jumping into the tempered glass market that is dominated by Corning’s Gorilla Glass. Asahi Glass of Japan produced “Dragon Trail" in 2011, and Schott of Germany introduced tempered glass named “Sensation” last year, and they are expanding their market shares. In Korea, KCC also picked tempered glass as its new business and has started research.

Recently, companies are moving to outright replace tempered glass with other materials. Apple is considering “sapphire glass” made from sapphire that is more rigid than glass as replacement for tempered glass. Korean smartphone manufacturers including Samsung Electronics and Pantech are also preparing to replace glass with reinforced plastic material.