Taiwan-based optical film makers Efun Technology and Gamma Optical, expecting touchscreen applications to take off, are gearing up their development of indium tin oxide (ITO) films, with volume production expected in the first quarter 2009, according to market sources.

Ying-Tsung Lu, president of Efun, indicated that the company expects to have an annual capacity of 0.8-1 million square meters of ITO films in 2009. Efun estimates that its revenues will increase by 20-30% in 2009 due to the addition of ITO shipments, while shipments of LCD brightness enhancement film (BEF) will be flat in 2009, Lu added.

Lu had previously disclosed that Efun's initial ITO film annual capacity would be 360,000 square meters, with the company planing to focus on touch panels first and then extend to flexible displays in the future when the technology for this segment mature.

Efun had consolidated November revenues of NT$178.2 million, down 28.5% compared to NT$249.3 million in October, and down 53.5% on year, according to data from the Taiwan Stock Exchange (TSE).

Gamma president Zegna Mai indicated that Gamma expects to produce 0.7-1 million square meters of ITO films in 2009. With the BEF market getting saturated, Gamma expects to see a 20% decrease in BEF shipments in 2009, Mai noted. The company estimates that revenues for BEF and ITO films will account for 60% and 40% of total revenues respectively.

Gamma had previously remarked that it would chiefly focus on small- to medium-size applications, but was also developing large-size ITO films, as demand for large-size touchscreen applications, such as notebooks and car-use-displays, would pick up in the future.

Gamma has reported November revenues of NT$55.5 million, down 28% from NT$77.2 million in October, and down 46% on year, according to data from the TSE.

Players in the display industry are hoping Microsoft's launch of the new operating system, Windows 7, which supports touch functionalities, will boost the touch panel market.

The global market for touchscreen modules will amount to 341 million units and US$3.4 billion in value in 2008, according to iSuppli. And the market is expected to grow to 833 million units by 2013, expanding at a compound annual growth rate (CAGR) of 19.5% from 2008. Global touchscreen module revenue are forecast to grow to US$6.4 billion by 2013, rising at a CAGR of 13.7% from 2008, according to the research firm.