Polarizer film maker Chi Mei Materials Technology, in view of fast growing demand from TFT-LCD panel makers in China, has set up a wholly owned subsidiary in eastern China specifically for tapping the market, and has had polarizer films enter certification by potential clients, according to the company.

Chi Mei Materials currently has 50% of its polarizer films used in panels of LCD monitors and 40% used in small-size LCD TV panels, and is developing models for use in LCD TV panels over 40-inch, the company indicated.

Currently, Taiwan-based TFT-LCD panel maker Chi Mei Innolux (CMI) accounts for 85-90% of Chi Mei Materials' revenues and Chunghwa Picture Tubes and HannStar Display a combined 10-15%. As Chi Mei Materials' supply occupies less than 50% of CMI's demand for polarizer films, there is room for CMI to increase order volumes, Chi Mei Materials indicated.

In addition to polarizer films, Chi Mei Materials has developed OCA (optical clear adhesive) and begun small-volume shipments as well as polarizer films used in IPS panels which are under product certification.

With four existing production lines for polarizer films, Chi Mei Materials will not expand capacity in the near future but will consider increasing production capacity through improving manufacturing processes when the existing capacity is fully utilized, the company indicated.

Chi Mei Materials posted revenues of NT$8.516 billion (US$291 million), gross margins of 9.18%, net operating profits of NT$665 million, net profits of NT$809 million, and net EPS of NT$1.93 for the first half of 2011. The company expects to list on the Taiwan Stock Exchange in the fourth quarter of 2011.