LG admits it can't keep up with panel demand for the iPad

LG has admitted that it is struggling to supply all the flat panel orders it’s receiving from Apple.

The screens, which are used in Apple’s iPad are causing the world’s second-largest liquid-crystal-display company issues, with LG’s chief executive, Kwon Young-soo, saying it may not be able to accommodate the orders until Q2 next year.

According to analyst firm Meko, as far as it’s aware, Apple uses Samsung as its second source for these panel TVs meaning Apple shouldn’t have a problem with its demand, given that Samsung is the leading supplier of this technology. However, according to the WSJ LG’s lack of supply is slowing down Apple’s global iPad sales.

“Apple is ordering more and more displays but it isn’t something we can be able to respond quickly,” Young-soo told the WSJ.

“I am not sure whether we can be able to meet orders from other companies for similar products, but we will be able to supply the displays without fail…by the second quarter of next year.”

And it seems some other Asian suppliers are taking note of Apple’s woes by recently growing their production of key components for electronics.

LG said it would also help combat its shortages by investing around 618 billion Korean won to build a 4.5 generation production line that can produce mobile displays used in smartphones and tablet PCs to meet robust demand.

Meanwhile, unlike smaller display makers, Mr. Kwon said, LG Display is currently seeing a high level of television inventories from set makers, and that the company may have to cut production of panels used for televisions in August.

However, this could all be a little bit too much too soon as according to Bob Reikes, analyst at Meko, the “demand for TV sets is still OK, just not quite as good as was hoped.”

He told us: “Q3 is the peak of the year for TV panel demand, to be built into sets for the Q4 ‘holiday season’ markets around the world. This year, anticipating a shortage in that period, some panel buyers have stocked up with panels during Q2.

“However demand is not quite as strong as was hoped, especially in China and to some extent in Europe, leaving some inventory overhang. That means that where you would normally see a shortage by now, it hasn’t really happened yet.”