With LCD panel demand for large-size applications such as TVs remaining dull, Mitsui Kinzoku and Sumitomo Electronics Taiwan (SET) are looking to withdraw from the standard chip-on-film (COF) substrate market.

Hitachi Cable at the end of March announced its withdrawal from the market for COF substrates - used to make driver ICs for large-size LCD panels - due to unfavorable market conditions as well as a strong yen that makes the already low-ASP product segment less competitive.

Mitsui recently disclosed that the company would discontinue production for COF as well as tape-automated-bonding (TAB) substrates for flat panel displays around the end of June, 2012.

Mitsui's exit is likely to cause a reduction of 120 million units in the global supply of COF substrates, industry watchers estimated.

On the heels of Mitsui's announcement, Chang Wah Electromaterials has revealed affiliate SET will scale down the COF substrate product lines for profitability reasons. SET currently has a monthly capacity of 45 million COF substrates.

SET will shift its focus to fine-pitch COF substrates made using semi-additive process, Chang Wah indicated. The segment contributes higher profits, targeting high-performance and portable consumer technology devices, Chang Wah said.