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LCD Panel Supply Chain To Remain Tight In Next 2 Months

Supplies of components and raw materials within the display industry are expected to remain tight in the next two months as a full-scale resumption of operations of related supply chain makers remains uncertain in China in the wake of the coronavirus outbreak, according to industry sources.

Since most local governments in China have given priority to large-scale enterprises for approvals for resumption of their operations, an estimated 30-40% of relatively small to medium enterprises (SMEs) have yet to restart their facilities, said the sources.

These SMEs specialize in the manufacture of connectors, optical materials, plastics components and packaging materials, of which panel makers normally do not have much inventory, and a further delay in resumption of work at these suppliers will increase the risks of supply chain disruption for panel makers, commented the sources.

It also remains to be seen if these SMEs still have sufficient financing to help them tide over the crisis triggered by the outbreak, the sources added.

While the capacity utilization rates for the front-end array process for flat panels could be ramped more rapidly thanks to automated facilities, current production of back-end LCD module (LCM) and downstream OEMs in China remains unclear due to transport and logistics controls, added the sources.

As a result, prices of LCD panels are set for an uptick, said the sources, citing data from market research firms.

Prices of small-size open cell LCD panels have gone up US$1-3 recently, said Sarah Lin, president of the energy saving device unit at backlight unit (BLU) maker Coretronic, but she added prices for large-size models including 70- and 80-inch ones have fallen US$1-2 due to weak demand for large-size TVs. Digitimes

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