Coronavirus hits China’s LCD/OLED panel output
February 1, 2020
By Chris Forrester
A report from IHS Markit Technology says that the growing coronavirus crisis is impacting production of LCD and OLED panels, including fabrication plants in the quarantined city of Wuhan.
The five factories in Wuhan producing liquid crystal displays (LCDs) and organic light-emitting diode (OLED) panels will experience near-term slowdowns in production compared to expected levels, according to IHS Markit technology research.
IHS Markit technology research says it is still assessing the magnitude of the supply shortfall on multiple display types and markets. However, leading Chinese panel makers stated they believe that total capacity utilisation for all LCD fabs in the country could fall by at least 10 per cent and perhaps by more than 20 per cent during the month of February.
IHS says that prices are already rising as supplies shrink. “Display facilities in Wuhan currently are dealing with the very real impacts of the coronavirus outbreak,” said David Hsieh, senior director, displays, at IHS Markit technology research. “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 our experts that a near-term production decline is unavoidable.”
IHS adds that beyond the immediate production impact at these facilities, the coronavirus is also likely to trigger delays in the ramp-up of manufacturing at new display fabs during the first half of 2020. This will reduce overall panel availability during the next few months. It also could result in further panel supply tightness as TV display buyers hasten the pace of their panel purchases to build stockpiles for future shortfalls.