Korean display equipment makers see their contracts delayed

South Korean display equipment makers are seeing their contracts with Chinese display panel makers delayed by around half a year, TheElec has learned.

This was because of the lockdown measures in China due to the surge in Covid-19 cases there that are delaying local panel makers’ spending plans.

Invenia saw the deadline for its 31.7 billion won contract with China’s HKC delayed from May 23 to December 31.

The equipment are expected to be delivered to HKC’s factory at Mianyang.

Invenia said originally the contract’s deadline was on January this year but it was already once postponed before.

Another equipment maker DMS said its 50.2 billion won contract with CSOT will also expire in October instead of this month. The kits are intended for CSOT’s factory at Guangzhou.

Charm Engineering also said its contract with CSOT, worth 13.4 billion won, saw its deadline pushed back from this month to October.

This was because of its customer’s request, which cited Covid-19 lockdowns as the reason.

YEST also said its contract with CSOT was pushed back to the same time.

These delays, coupled with a price drops of liquid crystal display panels, are expected to negatively affect these equipment makers’ earnings this year.

According to Display Supply Chain Consultants, spending in the display sector is expected to decline even further next year to US$5.3 billion, a 57% year-on-year drop.

This is expected to recover in 2024 to US$11.6 billion, an 117% year-on-year increase, according to the analyst firm.