TCL and Innolux expect tight LCD supply through 2021
Chip shortage may extend up to 2022 Chinese panel makers likely to control production rate to protect profits
Display panel manufacturers TCL and Innolux have said they are expecting supply of liquid crystal display (LCD) panels to be tight throughout the year.
TCL chairman Li Dongsheng said at a media briefing last week that the shortage in panels will continue in the first half of 2021. The situation for the second half of the year remains to be seen but panel supply in 2021 will overall be tight, the chairman said.
Innolux president James Yang made similar comments to Li, saying the shortage in LCD panels caused by strong demand for LCD since the spread of COVID-19 is expected to continue through 2021.
Yang said shortage in LCD components such as power semiconductors, driver ICs and glass substrates have caused companies to manufacture less LCD panels than there actual production capacity. The shortage in IC (integrated circuits, ie semiconductors) was the most serious and may continue up to the first half of 2022, the president said.
Major display panel makers themselves are also unlikely to increase their production volume for LCD panels to secure profitability.
Display panel makers in Greater China are also transitioning their Gen 8.5 TV lines for those of IT panels. These company want to manufacture LCD TV panels at their Gen 10.5 lines that will increase productivity for them.
Market research firm Omdia believes many panel makers have targeted panel prices to the levels in the first half of 2017, when prices peaked. This will be especially true for 55-inch panels, the firm said.
Due to the shortage in driver ICs, panel makers are preferring to manufacture the more profitable IT panels over TV panels. For TV panels, they are preferring to produce larger ones.
There also may be changes in the LCD panel supply chain as TV manufacturers won’t continue buying LCD panels as much as they did when the panel price increase is hurting their profitability.
Meanwhile, the tight LCD TV panel supply in the second half of 2020 was caused by companies lowering their production volume and demand being higher than expected.
Both Samsung and LG have requested their display-making affiliates to extend LCD production.
Panel prices have increased from June to December last year. For 32-inch, the price increased by 94%. Prices of 43-inch panels increased 65%, 50-inch 64%, 55-inch 59% and 65-inch 25%, according to Omdia.
Glass substrate makers NEG and AGC Fine Techno Korea suffered shutdowns of their factories in December and January, respectively, which further intensified the shortage in panels. These companies are yet to normalize production and supply to customers.