【Industry News】The Impact of Taiwan Province Earthquake on Panel Industry

After the earthquake in Taiwan Province, the factories of AUO and Innolux, the local leading panel enterprises, once stopped production for maintenance, and now most of their factories have resumed production. In response to this earthquake, many industry organizations and analysts have issued their views.

At 7: 58 on April 3, an earthquake of magnitude 7.3 occurred in the sea area of Hualien County, China (23.81 degrees north latitude and 121.74 degrees east longitude), with a focal depth of 12 kilometers. In addition, the aftershocks continued, causing most of AUO and Innolux machines to remain in a state of downtime. According to the 4-day survey of TrendForce Jibang Consulting, all the machines in AUO are offline for maintenance and are recovering one after another. In addition to the slight influence of Fab6, Innolux has a large number of downtime machines in other factories.

Considering the different conditions of each factory, TrendForce Jibang Consulting predicts that the earthquake will affect the production for at least 1-2 days (calculated in 2 days, it is estimated that the production area in April will be affected by about 1.2%), and almost all factories are affected because of the wide affected area, so it is estimated that the production of all applications may be affected to some extent.

TrendForce Jibang Consulting believes that due to the strong demand for TV panel stocking at this stage, it is expected that the overall crop rate water level of AUO and Innolux will increase to 85% and 83% respectively in April. However, affected by the earthquake, it does not rule out the possibility of further downward adjustment of the grain production rate.

According to the observation of various applications, the TV-based factory is almost fully loaded, so it is expected that under the influence of this earthquake, the shipment of some TV panels may be affected. The price of TV panels was originally expected to continue to rise in April, but the demand for small and medium-sized TV panels has slowed down.

After the earthquake, we will continue to pay attention to whether the rising momentum of the price of small and medium-sized TV panels can continue until May. However, TrendForce Jibang Consulting believes that at present, the influence of Taiwan panel factories on TV panel prices has declined, so unless the impact of the earthquake on the production line is extended to more than one week, the impact on the development trend of TV panel prices is limited.

On the other hand, as far as the recent situation of IT panels is concerned, there is a strong demand for stocking of Monitor panels recently. However, since there is still room for surplus productivity in some factories, we can still observe whether the demand can be made up after the production lines are resumed one after another. The price of Monitor panel has started to rebound obviously recently, and with the continuous improvement of demand, we will pay attention to whether the impact of the earthquake on production capacity has the opportunity to continue to push up and expand the price increase of panel.

The current demand for NB panels continues to be weak, and the panel factory still has inventory to cope with it. It is estimated that the impact on shipments at this stage is relatively small. However, after entering the second quarter, it is expected that the demand for NB panels will gradually increase. For panel factories eager to raise panel prices, it will be the focus of observation in the next 1~2 months whether they have the opportunity to raise NB panel prices by taking advantage of the impact on production capacity after the earthquake.

According to the insight analysis of AVC industrial chain, in order to cope with the earthquake, the original panel factories all had shock absorption design, and the automatic shutdown of equipment was set to level 3. When the earthquake occurred above level 3, the production line equipment would be shut down, so the production lines of the panel factories were all affected by the earthquake and stopped running, but the current impact on the panel factories needs to be evaluated.

However, if the equipment is not damaged, the repair time will be very short, and it will take 1 day to prepare the personnel to resume work and production. However, it will take 3-5 days for the equipment to be repaired until it is fully produced. If the production line is not fully produced, it may have no impact on the overall production capacity. The production lines of TV panels of AUO and INX are mainly G6/7/8.5/8.6. At present, all production lines of AUO and INX panel factories are basically in a state of high productivity. Through capacity calculation and evaluation, the production lines of Fab8a+8b with 100K capacity of INX are affected by about 10K, Fab7 with 140K capacity is affected by about 14K, and Fab 6 with 240K capacity is affected by 24K. At present, it is still happening in Taiwan Province.

However, Rong Chao Ping, research director of AVC Revo, said that according to the prediction of research institutions, the short-term shutdown of panel factories caused by the Taiwan Province earthquake will support the price increase trend of LCD panels. "AUO and Innolux's LCD TV panel production capacity accounts for about 20% of the world, and the LCD panel production capacity of IT products accounts for a higher proportion. All the production lines of AUO and Innolux had high capacity utilization rate before the earthquake. The earthquake in Taiwan Province on April 3 will affect the supply of LCD panels. " Rong Chaoping estimated that if the monthly production capacity of 100,000 pieces of Innolux's 8th generation line may affect about 10,000 pieces, the monthly production capacity of 140,000 pieces of the 7th generation line may affect about 14,000 pieces, and the monthly production capacity of 240,000 pieces of the 6th generation line may affect about 24,000 pieces.

In view of the impact of the earthquake in Taiwan Province, Xie Qinyi, general manager of Omdia Display Research, also analyzed on April 3 that the production of panel factories in the north of Taichung, Taiwan Province, including some factories in AUO and Innolux, was affected, and the production capacity would take about 1-2 days to recover because of the suspension and recalibration of the machines. The overall LCD panel supply in April will be affected. In addition, semiconductor driver chip wafer foundries, such as TSMC, World Advanced and UMC, are located in the north of Taichung, and their production capacity is also affected for half a day to one day, which will affect the supply of panel driver chips.