Coronavirus Disrupts Display Panel Production in China, Spurring Supply Shortfalls and Rising Prices
The study is prepared by Ahmed Sabry, Senior Research Engineer at SiliconExpert
Below is further information on the effects of the Coronavirus on global electronics companies.
As a reminder, be sure to continue checking back on the report compiled by SiliconExpert researchers on the electronics supplier announcements. For the latest version, click here:
The recent coronavirus emergency in China, which is expanding at a global level, represents a crisis in the electronics supply chain industry now and in the near future at least.
The recent escalating coronavirus crisis is impacting production at display panel factories located in the semi-quarantined city of Wuhan, China. This means the production is going to experience a significant near-term reduction in the scheduled global supply of panels used in liquid crystal display televisions (LCDs) and other electronics products.
Display factories in Wuhan are currently dealing with the very real impacts of the coronavirus outbreak. These factories are facing shortages of both labor and key components as a result of mandates designed to limit the contagion’s spread. In the face of these challenges, top display suppliers in China have informed that a near-term production decline is unavoidable. Wuhan was quickly becoming a major hub for display manufacturing with LCD and OLED fabs already in production and a few more starting productions in 2020.
As a consequence of this, the leading Chinese suppliers of LCD panels for TVs, notebook PCs, and PC monitors now are planning to raise panel prices more aggressively. The price for an open-cell LCD-TV panel was originally expected to rise by $1 or $2 per month in February. However, industry reports state that the actual increase maybe $3 to $5 for the month.
In 2020, Wuhan was expected to account for 6% of worldwide mobile OLED capacity, 3% of mobile LCD capacity and 2% of LCD TV capacity. In 2021, these figures were predicted to rise to 9% of mobile OLED capacity and 4% of LCD TV capacity. The mayor of Wuhan revealed that 5M of the 11M has left Wuhan for Chinese New Year and cannot return until the travel ban is lifted.
Here is a list of display companies in Wuhan and the impacts of their supply chain:
1. Shenzhen China Star Optoelectronics Technology Co., Ltd:
China Star has a 50K substrate per month G6 LTPS LCD fab in Wuhan which began production in 2016.
China Star also has a G6 flexible OLED fab in Wuhan. The first phase of 15K began mass production in April 2019. Its production is expected to be impacted. Some equipment for integrated touch capability (Y-OCTA) was expected to be installed in March 2020 which could be impacted.
The second phase of 15K was expected to be installed in October of 2020 with POs issued from November of 2019. The 3rd phase of 15K is also expected in Wuhan with equipment awards and purchase orders in the process of being issued. Some of the POs for both phases may be delayed which could impact delivery timing.
China Star Optoelectronics Technology (CSOT) may suffer a shortage of upstream raw materials due to mounting transport curbs in China as a means to contain the epidemic, according to industry sources.
2. Tianma Microelectronics Co., Ltd:
It has an older 30K substrate per month a-Si G4.5 LCD fab that has been in operation since 2010.
It also has a G6 OLED fab in Wuhan. The first phase of 15K/month of mixed flexible and rigid capacity began production in 2018. Equipment is being moved in for the 2nd phase now. Equipment is likely being moved-in from November 2019 to March 2020 and beyond.
Tianma Microelectronics Co. Ltd. faces delayed return of workers and supply interruptions in its Wuhan plant.
3. BOE Technology Group:
BOE has a G10.5 a-Si LCD fab in Wuhan. It was expected to begin production in January with additional capacity coming online every 3 months through 2020 and much of 2021. New equipment is also in process of being installed this month and this will continue through 2020 as well.
BOE Technology Group Co Ltd said that one of its plants at Wuhan had encountered a supply shortage due to the virus.
4. Apple Inc:
Apple manufactures nearly all of its iPhones in China.
Apple already closed one store in China and restricted store hours in response to the coronavirus spread.
5. TCL CORPORATION:
TCL Corp is one of the makers of display panels and televisions.
TCL Corporation said that while the lines at its China Star Optoelectronics Technology Unit (CSOT) for LCD screens “operate non-stop all-year-round,” its Wuhan factories can expect delays in manufacturing materials supply.
Advantech is one of the leading companies at touch panels and monitors.
Advantech announced at January 29, 2020, that Wuhan coronavirus outbreak has directly impacted our Advantech Kunshan Manufacturing Center (AKMC), in Kunshan, China and as the government of Shanghai, extended the holiday until February 9th to try and help reduce the spread of the epidemic during this busy travel season.
So AKMC informed that deliveries may be delayed during this unplanned and extended shutdown period.
AKMC apologizes in advance for any inconvenience delayed shipments from AKMC.
7. Corning Incorporated:
Corning is one of the world's leading innovators in materials science, with a 168-year track record of life-changing inventions.
Corning Incorporated is restricting its employees from traveling to and from China after one of its workers was tested at Corning Hospital last week for Coronavirus.
As Shipments for BOE and Tianma will be impacted by coronavirus breakout, Corning will also likely be impacted eventually.
8. ASUSTeK Computer Inc:
ASUS is a leading company driven by innovation and commitment to quality for products that include notebooks, netbooks, motherboards, graphics cards, ...
The Asus ROG Phone 2 supply chain will be affected by the ongoing Coronavirus situation in China. Asus says the phone will be back in stock soon.
Foxconn, which has COO in Taiwan manufactures key components of the iPhone and supplies many of the world's largest tech companies.
Foxconn said that the coronavirus outbreak has not impacted its production schedules.
10. II-VI INCORPORATED:
II-VI Incorporated is a global leader in engineered materials, optoelectronic components and optical systems offering vertically integrated solutions for applications in materials processing, communications, aerospace & defense, life sciences, semiconductor capital equipment, automotive and consumer electronics.
II-VI said that the short-term impact of the virus would likely hit revenues by around $50 million in the current quarter, with total sales for the period likely to end up somewhere between $550 million and $600 million.
11. Allegro Microsystems:
Allegro Microsystems is redefining the future of power and sensing technologies, helping our customers bring breakthrough innovations to life.
Allegro announced on January 31, 2020, that If the China Customs and carriers resume operation on Feb 10 as currently announced, we do not foresee supply issues.
SiliconExpert Affected Product lines:
As a result of the above readings, these products may be affected by Coronavirus at the field of displays:
LCD Character Modules
LCD Touch Screens
STN Graphic Modules
February 20, 2020. The study is prepared by Ahmed Sabry, Senior Research Engineer at SiliconExpert