Abstract With the critical development trend of industry of the world, TFT-LCD industry, following the footstep of semi-conductive industry, has become an important leading industry of Taiwan to the economic policy of the Government. The ¡§Two Trillion Double Star¡¨plan pro- -moted by Industrial Development Bureau fo Taiwan intends to push up the production values of the two industries, semi-conductive and flat panel photonic displayer, to exceed NT$ 1 trillion respectively in 2006. This plan also promotes digital contents and biotechnical industry to be two star industries with high potentials of development. Therefore, TFT- LCD industry is undoubtedly the core industry of the next wave of econo- mic growth in Taiwan. According to the distinguishing characteristics of capital and technology density, short-lived productive cycle, and variable productive technique in TFT-LCD industry, cash flow out of investment activities became the key point to promote the competitiveness with the continuously overcharge in the next generation panel field.In addition, the investors would find that the TFT-LCD panel factories have no ability to support the cash flow out which invested in equipment if they do not ask for finance. In this paper, we attempt to investigate the relationship between variation of cash flow in operation, investment, and finance activities and potential risk of operation in enterprise by financial statement in TFT-LCD industry. In addition, this dissertation commence with ROE and development from Du-Pont Formula. Our research decomposes ROE to fundamental elements in enterprise step by step, such as the construction of cost and expense and the risk of business. Furthermore, we afford a referable approach to estimate performance of companies by Du-Pont Formula. Key Words¡G Thin Film Transistor (TFT), Liquid Crystal Display (LCD),Cash Flow, Risk, Risk Management, Du Pont Equation, Du Pont Ratio.

LCD panel industry is one of the most promising industries in the world. Taiwanese LCD panel makers have performed quite well in the past few years. On the controversy, the BLU has been viewed as a low entry barrier industry with many suppliers and its profit margin seems to have been squeezed due mainly to its position between big giant LCD panel makers and limited key materials suppliers. However, BLU is one of Taiwan's few competitive industries in the global market because of its high self-sufficient rate and leading technologies over their Korean and Japanese competitors. Sometimes, Taiwan¡¦s BLU industry is even performing better than other component industries within the LCD industry supply chain. It's worth examining the competitive advantages for Taiwan BLU industry by analyzing "Company R", one of the leaders in Taiwan BLU industry. We start our research by highlighting the key characteristics of the LCD industry and the dynamics of the BLU supply chain. After analyzing the marketing, technology, and management requirements for the BLU industry, we have concluded the key success factors of the BLU industry. Then with a brief introduction of ¡§Company R¡¨, we have identified the company's competitive advantages and potential long-term strategies by analyzing the company¡¦s unique positioning and resources, and comparing those with the above-mentioned key success factors of the BLU industry. According to our study, demand for BLU should continue to grow with increasing demand for LCD TVs, in longer term. The major issue for LCD panel industry will be "demand and supply" relationship, while for BLU industry is the "volume" and its "competitive advantages" for each company. The technology development for BLU will continue. BLU is not just a so-called ¡§assembling business¡¨, and its industry entry barrier is much higher than before. Besides, the cluster effect and vertical integration are inevitable for LCD panel makers. To be successful in BLU industry, a company not only needs to focus on these key success factors, but also needs to keep developing and improving its core competencies relative to its competitors.