LCD fabs run by BOE Technology, China Star Optoelectronics Technology (CSOT) and Tianma Microelectronics in Wuhan - the epicenter of the coronavirus outbreak - 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.
Sources from the three panel makers, which have been keeping their Wuhan fabs at lower utilization rates since the start of the Lunar New Year holidays, noted they still have sufficient materials in stock enabling them to maintain operations for a short period.
However, they also voiced concerns that some upstream materials may experience short-term lag due to issues including suppliers' failure to resume production on time or unsteady logistics caused by transport curbs, increasing the risk of production disruption, the sources said.
Wuhan is the home to BOE's 10.5G line; CSOT's 6G LTPS line (Fab t3) and 6G OLED line (Fab t4); and Tianma's 4.5G a-Si line and 6G OLED line.
BOE's 10.5G line in Wuhan kicked off initial production in December 2019, and the company had just begun to ramp output and yield rates before the outbreak. The fab consumed about 2,000 substrates in January, but its production pace is set to slow down in February, said the sources.
CSOT's Fab t3 is focusing on the production of small- to medium-size LTPS panels, while Fab t4 is currently rolling out flexible AMOLED panels. The company insisted that the operations of the two fabs have remained normal as the inventories of raw materials are still sufficient and workers staying in the factories have been unaffected.
The company also said that the production of large-size panels at its t1, t2, t6 and t7 fabs in Shenzhen as well as its LCD module plant in Hueizhou are also operating smoothly at the moment, adding that it will adjust production and operation strategies in a timely manner in the response to the epidemic and market situations.
Tiama, which is focusing on production for medical applications in Wuhan, said that it has been trying to ramp up output as it has seen expanded demand and even some short lead-time orders for medical panels since the outbreak began, according to the sources.
Tianma said that it is seeking support from the government and its suppliers in order to maintain sufficient supply of needed materials for keeping normal production.
However, other sources indicated that the current production utilization rates at CSOT's and Tianma's plants in Wuhan are relatively low due to labor shortages.
Moreover, since most of the backend LCD module (LCM) production facilities, which require more manual works, of all major panel makers - Korean, Taiwanese and Chinese - are situated in China, global shipments of various kinds of display devices will be affected due to labor shortages in China, commented the sources.
As the production is slowing down, supply of large-size panels will be reduced in the near term, with the prices of 55- and 65-inch TV panels to rise in February, said the sources.
Article translated by Steve Shen
