Supply of key materials and components is tight, and LCD panel costs are expected to slow down
Due to the tight supply of display panel materials and components including driver integrated circuits (IC), glass substrates and polarizers, and price increases, the rate of decline in the cost of liquid crystal display panels is expected to slow down.
According to the latest report provided by the market research organization IHS Markit, the supply of driver ICs is expected to tighten in 2018, exceeding 4% of demand. Manufacturing plants have accordingly reduced the production capacity of cheap driver ICs, while increasing the production of high-margin integrated circuits and large-scale integrated circuits (LSI), mainly to meet orders for the production of the Internet of Things (IoT) and automotive technology industries. In addition, large-size panel driver ICs mainly use 8-inch wafer production. Currently, there is no foundry that will further invest in the production of these wafer sizes, but instead invest in the production of 12-inch wafers.
IHS Markit senior analyst Tadashi Uno said: “It seems that panel manufacturers can only ensure the supply of driver ICs by offering higher prices.”
In the first half of 2018, the driver The average price of IC has risen by about 10%. The tight supply of driver ICs has also affected the prices of IT panels, such as desktop monitors, notebook computers and tablet PC panels, and since the third quarter of 2018, this impact has also extended to the prices of TV and smartphone panels.
Since the third quarter of 2018, the supply of glass substrates has also become tight. The supply and demand surplus in the third quarter has been below 5% (5% is regarded as the critical point of tight supply). Uno pointed out: “Major glass manufacturers are investing in the production of glass melting tank kilns in China, but the increasing glass consumption of Chinese panel manufacturers means that it exceeds the country’s glass production capacity by more than twice. At the same time , Mainland Chinese panel makers also import related products from Japan, South Korea and Taiwan, but they are also facing glass production delays and delivery issues.'
At the same time, since the third quarter, polarizers There is also a tense situation in the supply. Just in July this year, due to heavy rain in Japan, film makers such as Dai Nippon Printing and Nitto Denko stopped operations for more than a week. Although production facilities were not directly damaged, damage to infrastructure such as roads, water plants, and power facilities caused delays in the delivery of related goods.
Even if the business has resumed, related logistics problems still exist. Irene Heo, senior principal analyst at IHS Markit, said: 'Non-TAC polarizers, especially acrylic polarizers, are already in short supply, and the recent floods have made the situation worse.' In the third quarter of this year, the oversupply rate of polarizers is expected to be 4%, which is below the 5% benchmark.
Compared with 2017, in the third quarter of 2018, the cash cost of a typical 32-inch high-definition (HD) open circuit battery is expected to drop by 1.4%. Uno said: 'The main reason for the cost decline is the increase in the price of driver ICs. However, the decline in the prices of glass substrates and polarizers is relatively stable.' Source: OFweek