Efforts by BOE Technology to ramp up the output from its 10.5G line in Wuhan have been undermined by the coronavirus outbreak, which is pushing back the company’s goal of reaching full capacity by February 2021, according to industry sources.
BOE kicked off official operation of the Wuhan 10.5G plant – its second 10.5G fab – in November 2019 focusing on production of 65- and 75-inch LCD TV panels.
Based on BOE’s original roadmap, it aimed to ramp up the plant’s capacity to 30,000 substrates a month in its first-phase volume production starting one quarter after initial trial production, then reach 90,000 substrates by year-end 2020 and full capacity at 120,000 substrates by February 2021, the sources indicated.
However, the 10.5G fab is currently operating at a low capacity of about 10,000-20,000 substrates a month, which could undermine the company’s ability to fulfill its orders slated for delivery in the second and third quarters, the sources said.
Digitimes Research believes that shortages of some key components are causing a real headache for most panel makers in China, with the most critical ones including PCBs, backlit units (BLUs) and polarizers.
Most panel makers are utilizing their components in stock for production that will support their operations for 4-6 weeks till mid- or end-March, with only 70% of their orders being fulfilled, Digitimes Research estimates.
While acknowledging its short-term sales performance may be affected by the outbreak, sources at BOE said that the impact will be limited due to slow shipments in the off-peak season in the first quarter and expects shipments to start picking up from the second quarter onward, driven by increasing demand for large-size applications and international sports events.
BOE also expects the outbreak to not have much impact on its AMOLED panel business. It ranked second for global AMOLED panel shipments in 2019 and also accounted for 86.7% share of China’s AMOLED panel market in the year, the company said, citing data from market research firms.
The firm’s AMOLED panels have been used for production of Huawei’s foldable smartphone Mate X, Lenovo’s (Motorola) foldable model Razr, Oppo’s 5G phones and some models of Intel-based foldable notebooks, noted the sources.―Digitimes