Panel Plant Delays Expansion in China

Affected by the epidemic, the resumption of work and staff arrival rates, and the disruption in the distribution of production equipment caused by the disruption of global logistics and personnel movements, the global LCD panel leaders BOE, Tianma and other mainland indicator factories have recently postponed their installation expansion plans. , The time ranges from one quarter to six months. The hindered expansion of the Lu plant's production will help support panel prices, which is beneficial to Taiwanese companies such as Innolux and AUO.

The legal person pointed out that the market originally expected that the Tokyo Olympics would drive the sales of large-sized LCD panels, allowing Taiwan ’s panel double tiger operation to see the cloud, but the delay of the Eastern Olympics to be held next year due to the epidemic, causing the market to worry that panel prices would once again reverse downward downward doubt. Obstacles in the expansion of production by mainland indicator companies such as BOE will prevent market supply from being restrained and thus support panel quotations.

China's panel factories have accelerated production expansion under official subsidies in recent years, and have become price disruptors, but the recent spread of the epidemic has also hindered the expansion of BOE and other mainland panel indicator factories.

South Korea's three major panel equipment vendors SFA, Device ENG and SNU Precision have confirmed that they have received the contract extension plans for the mainland panel indicator factories, which will be extended from one quarter to six months.

Countries around the world have implemented traffic control or even blocked cities due to epidemic prevention. Global logistics and personnel flow have been chaotic, and equipment vendors' shipments have been affected. Mainland panel factories have successively decided to delay the introduction of new equipment. Among them, the Korean factory SFA has extended its contract with Tianma for six months, and the original contract was terminated on March 14. At the same time, at the request of Tianma, Device ENG also extended its contract with Tianma worth USD 7.93 million.

In addition, SNU Precision said that its contract with BOE will be extended to October. It is understood that the three contracts are about the equipment of the two Chinese panel makers in Wuhan.

The Korean display equipment industry pointed out that the equipment ordered by the mainland panel factory is currently stored in the warehouse, but due to the subsequent impact of the new crown pneumonia epidemic, the factory cannot operate normally and the delivery time of the equipment has become unknown. The equipment industry is worried, as mainland panel companies have delayed the introduction of equipment, capital flows will decline. If each device worth millions of dollars can only be stored in a warehouse, the operation of the equipment industry is bound to be impacted.

Taiwan-based equipment manufacturers also said that the epidemic did cause delays in the installation schedule of mainland panel factories, mainly due to differences in return rates and staff turnover rates. Although transportation has been restored after the closure of the city, most of the machines completed by the equipment factory cannot be transported to the plant area of ​​the mainland noodle factory. Because even if it is delivered, there are not enough installers. The slowdown in the expansion of the land plant will help support the price of the panel, which is beneficial to the double tigers of the panel.