China has become the third largest producer of panels behind South Korea and Taiwan.

According to industry sources, China has become the largest market for LCD TVs and an important producer for LCD displays. Many firms have been shifting the focus to the market in China. South Korea-based Samsung Electronics, LG Display and Taiwan-based AU Optronics (AUO) have been planning to set up factories and invest in China.

Other firms such as Sharp and China-based BOE Technology have been expanding panel production to meet demand. According to BOE, the top four panel makers, Samsung Electronics, LG Display, AUO and Chimei Innolux, account for 80% of worldwide market share. Japan-based firms only account for 10-12% of total market share.

According to BOE, as production at its 8.5G plant begins, BOE will take about 6% of total market share.

According to DisplaySearch, China's production of large-size panels has been exceeding Japan since second-quarter 2011.

China's total panel shipments in the first quarter, including panels for netbooks, tablet PCs, notebooks, LCD monitors and LCD TVs, was about 2.7 million units. Through mass production in the second quarter, the figure has increased to 3.4 million units, exceeding Japan's 2.3 million units.

Future forecasts indicate South Korea-based panel makers will account for about 49% of total panel supply in 2012, and Taiwan-based firms 39%.