Long-term oversupply of large-size TFT LCD panels will lead to traditional factory restructuring

- Sep 18, 2018-


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It is reported that in the third quarter of 2018, large-scale thin film transistor liquid crystal display (TFT LCD) panel manufacturers are expected to reduce the production of small-sized panels such as 32-inch, 40-inch and 43-inch panels, thus contributing to the stability of panel prices. However, IHS Markit said that in the long run, the problem of oversupply still exists, which will eventually lead to the reorganization of the traditional TFT LCD fab.

According to relevant data, the new plant currently under planning will increase the capacity of large display panels by 31% or 77.7 million square meters from 2018 to 2021. However, according to current demand forecasts, there will be about 49 million square meters of output in 2021, far exceeding market demand. This excess supply and demand situation is expected to continue to grow from 12% in 2018 to 23% in 2021, still far above the proportion that can maintain a balanced market.

IHS Markit said that a large number of LCD TV panel production capacity will be built between 2019 and 2021, mainly from China's Gen10.5 / 11 factory.

David Hsieh, senior director of IHS Markit Display, said: "Some panel makers may be forced to reduce utilization, and some planned capacity may never be built. In addition, traditional factory restructuring may accelerate in the next few years. In order to make TFT LCD The industry is returning to a balanced supply and demand level and may need to close multiple Gen 5, Gen 6, or even Gen 8 plants."

For example, shutting down half of all Gen 5 and Gen 6 amorphous silicon (a-Si) capacity in Taiwan will reduce production capacity by about 18 million square meters. It may also be necessary to turn off larger glass substrate throughput, such as Gen 8, to restore the market balance.

Traditional factory restructuring may include fab closure, facility integration, or technology conversion, such as active matrix organic light emitting diode (AMOLED) panels, ePaper backplanes, and sensors.

Fab reorganization can be attributed to a variety of reasons, such as no longer competitive, equipment is old, panel makers' business focus changes, excessive spending, and profitability pressures.

Hsieh said: “Oversupply is not the end. For a long time, the industry has been able to dynamically adjust the market supply and demand balance. This process may bring challenges to supply chain companies. However, the delayed expansion of new plants, restructuring of traditional fabs And the potential growth in demand due to falling panel prices will help the LCD industry eventually return to equilibrium."