Abstract
AbstractWith the upcoming competition in the TFT-LCD (thin film transistor-LCD) market, the panel makers endeavored to cut down on the product cost in any way possible. One of the key componets, Back Light (BL) occupies the largest share of the panel cost. For instance, in a 30-inch LCD-TV the BL portion is 44% of the panel cost. Because of the large quantity of panel outputs, the high BL cost is too burdensome. Consequently, it is worth while for the panel makers to concentrate on cost reduction.As is known to all, the BL is a kind of labor-intensive assembly manufacturing with high speed of capacities copying. In addition, there are about 30 BL makers in Taiwan and they are capable of producing more than 90% of their own components. Therefore, the downstream and primary producers, panel makers should reasonably take a leading position in price negotiation and dominate the co-operative relationship with BL makers. However, this real situation is counter to our intuition. For example, the Radlant Opto-Electronics Corporation, whose output is 99.93% BL products, had net profit of 18.76% of their gross income in 2002. This great benefit indicated that it has power to balance the dominant position held by the panel makers.Why haven’t the panel makers gained upper hand in the network with BL makers? Were the technologies used in the BL not as simple as we had imagined? Did other factors contribute to giving BL makers the advantages over panel makers? This research focused on those important issues, discovering the balance of power between panel makers and BL makers, and inferring a conclusion of the way how panel makers overtake their dominance in interdependence and reach the goal of reducing the considerable BL cost.