Flat panels in big shortage – hello 3D!

Taiwanese panel manufacturers are forecasting that a lack of supply of light guide plates (LGPs) and reflective films will mean a difficult second half of this year for TFT-LCD makers, who may barely get the components they need to deliver panels to the market.

Supply for reflective films was 20 to 30 percent lower than demand for the second quarter of this year. This has forced many manufacturers to place orders for months in advance in order to try to secure the components they need, particularly as we approach the high manufacturing period in the third quarter, while will produce panels to be sold in the run up to Christmas.

Despite the huge demand the manufacturers of the components, such as Toray Industries, Teijin Chemical, and SKC, are unwilling to increase supplies to meet the demands, mostly likely due to fears about the global markets and whether demand will really stay so high for long.

Driver ICs, LEDs and open-cell panels are also in short supply, but not to the same extent as LGPs and reflective films.

TechEye spoke to Bob Raikes, display analyst at Meko, who told us that this high demand within the panel industry is driven by the TV industry, which has an annual season cycle, with peak panel production in the third quarter ready for sets to be sold in the fourth quarter. He said that it is not surprising then that supply within the industry will be tight during the third quarter, as otherwise there would be “dramatic oversupply” in the other, quieter quarters. He said that third quarter shortages are “the norm” for that season.

Raikes told us that LGPs distribute the light from the LEDs around the edge of the screen, across the surface of the screen, while reflective films help to minimise the proportion of light that gets lost by trying to get out of the LGP in the wrong direction. He said that the push to LED backlights is causing the big shortages of these two compontents.

“There is some talk of driver chip shortages,” he added. “But we expect the industry to be able to meet the needs of consumers, by and large, over the holiday season. Inventories in the TV business in Europe are OK.”

He said that while shortages will be there in the third quarter, there will be more capacity coming on stream later in the year, when sales tend to fall again, “so any shortages will quickly be dealt with”.