THINNING FLAT PANELS

Materials suppliers are thrilled by the flat-panel industry's growth, but are under pressure to trim back on costs

When airline pilot Mick Jaffe and his wife, Chris, went shopping in Hong Kong to replace their television set a few weeks ago, they did not do what producers of flat-screen TVs are expecting. After looking at all the models, the Jaffes left the shop with a traditional 29-inch cathode-ray tube set instead of one of the newer models based on plasma or liquid-crystal technology. "In Taiwan, Frank Wang, a sales manager at local color resist producer Eternal Chemical, says his firm has an advantage in marketing to Taiwanese display manufacturers. "We can offer better service, we have a common language, and we're more familiar with the local market," he says. But he admits that Eternal has a hard time parlaying this advantage into new sales. Customers find it risky to switch to a new supplier whose material might later prove unsuitable. Moreover, display manufacturing equipment made in Japan is often guaranteed to work only with certain Japanese materials.