DSCC Analysis – How Coronavirus Is Impacting Display Panel Supplies

The digital display supply chain analyst firm DSCC has a thorough piece up on its website about the impact the Wuhan Coronavirus outbreak is having on the display industry, noting how city lockdowns and factory closings have slowed or stopped production of some panels.

In terms of its impact on the display industry, the latest we have heard is as follows:

  • Since transportation into Wuhan has been stopped, production will be impacted at:
    • CSOT’s T3 LTPS and T4 flexible OLED fabs
    • Tianma’s G4.5 a-Si LCD and G6 OLED fab
    • BOE’s B17 G10.5 a-Si LCD fab
  • Since materials and parts can’t be supplied, the schedule for BOE’s mass production, which was expected to start in Q1’20, is expected to be delayed by at least one quarter. We will likely be delaying all installations in Wuhan in Q1’20 by one quarter.
  • Engineers from one company we talked to who were involved in setting up key equipment at BOE have sent back 60 engineers on January 28th. It is not clear when they will return.
  • The Corning plant that was supposed to be in operation from the end of 2019 has been delayed. As a result, Corning is shipping G10.5 glass from Hefei which one would think would test China’s logistics and impact yields when trying to ship glass that large.
  • We believe 1K substrates were inputted at BOE B17 in January.
  • LGD ordered all short-term staff from Korea to return to Korea.
  • The Chinese government is reportedly penalizing companies with a 1-month shutdown if an employee is confirmed to be infected while at work. Thus, LGD is considering closing their factories till at least February 9th, but has not decided yet. Samsung has extended holiday closures for some factories in line with Chinese government guidance.

Regarding end products:

  • TV sell-through will be significantly impacted by the lack of shopping during the lockdown. TV sell through estimates for the Chinese New Year holiday are being cut from 2.5M to 1-1.5M. With retail and company shutdowns being extended, the Y/Y drop will likely grow larger.
  • From a TV production standpoint, most of the brands and OEMs are located in Shenzhen and Dongguan, so the impact on production is reduced. However, the timing of when workers will return is unclear since they are spread throughout China for the holidays and travel is restricted.
  • The launch of the Apple SE2 may be impacted if Foxconn employees cannot return to Zhengzhou before the middle of February.

The full piece, which gets into things like business performance, is here.

Much of this has to do with production of TVs and smartphone displays, but impacts commercial product, as well. While we may think of much of the digital signage LCD display product coming from Korea and Japan, much of the manufacturing – either finished product or key components – comes out of China.