LG’s Gen-8.5 LCD plant halted, puts large panels under pressure
It may take between two and four weeks for operations to resume, according to unnamed sources, which analysts think could exacerbate global panel shortages in the third quarter.
According to WitsView, a division of market research firm TrendForce, such a suspension could result in a loss of 715,000 square meters of large-size panels a month.
While panel quotes have softened during the second quarter, the third quarter will see a return of seasonal demand from device vendors and this accident at P8-1 will contribute to a tightening of the supply and help prop up prices to some extent, expects WitsView.
WitsView’s analysis model initially estimated that the glut ratio of large-size panel market for this third quarter will be 4%. The shutdown of P8-1 has led to a downward revision.
If the fab is closed for two weeks, then the projected glut ratio will drop to 3.4%. A four-week closure will further lower the figure down to 2.8%. On the whole, the supply in the third quarter will be tighter than initially anticipated.
According to WitsView, the accident at P8-1 is too sudden for device vendors to make adjustments in their panel purchases and product mixes. LGD’s compatriot and Japanese clients are likely to suffer the most from the supply disruption, while some orders will be shifted to Samsung Display (SDC) and BOE Technology (BOE).
The loss of production capacity is also expected to increase the aggressiveness of stock up activities during the busy season of the third quarter, benefiting the entire panel industry.