(Yicai) Sept. 11 -- Against the backdrop of slowing display panel industry growth, leading Chinese panel makers are considering foraying into the business of glass substrates for advanced semiconductor packaging.

Tianma Microelectronics is working with its supply chain partners to develop advanced large fan-out panel-level packaging technology, the company said in an exchange filing yesterday. They are now collaborating on glass substrate samples, but the project remains in the technical pre-research stage, it added.

TCL China Star Optoelectronics Technology is advancing the validation of key processes for glass substrates and aims to achieve sample display by the end of the year, the firm said on Aug. 28. If the performance indicators and technical route of the samples meet expectations, TCL CSOT will start building a pilot production line within this year.

BOE Technology’s progress is relatively faster. The company said in July that it completed the construction of a pilot production line for glass substrates with a monthly production capacity of 1,000 pieces in the first half of the year, and had sent samples of large high-layer glass substrates to potential clients for validation.

Despite Chinese panel makers’ successive entry into the glass substrate business, their factories are still in the early stages of industrialization, including technology pre-research, sample development, pilot platform construction, and customer sample validation.

Chinese panel plants that have made the fastest progress in developing glass substrates are still in the stage of sample validation by customers, Zhou Hua, chief analyst at Cinno Research, told Yicai. Therefore, they are expected to achieve small-scale supply next year at the earliest and large-scale supply around 2028 to 2030, he noted, adding that there is still a gap of one to two years between them and leading overseas companies.

The role panel factories will play in the glass substrate industry will likely be closer to that of a provider of large-scale manufacturing capabilities, Zhou predicted.

Panel companies' advantages mainly lie in their ability to process large glass substrates, manage yields, and control costs, Zhou said. However, most of them lack cooperation with semiconductor firms, so it will take them time to accumulate data on product reliability.

This also means that panel factories producing glass substrates are not just adding a product category to their lineup, but they are also entering a brand-new supply chain with a customer structure, process standards, and verification system that are much different than their original panel business, according to Zhou.

Panel makers must successfully turn their accumulated abilities in producing large glass substrates, yield management, and cost control into competitiveness in the semiconductor glass packaging business, and only then can they achieve a successful transformation, Zhou noted.

Editors: Tang Shihua, Futura Costaglione