According to Juheng.com, the global panel industry is ushering in the spring. Panel makers including BOE, LGD, AUO and Innolux have all achieved profit growth last year. However, as market demand remains stable and high, the production capacity of upstream materials such as polarizers and glass substrates continues to be tight, which has become a topic for future operation of panel factories.

From 2018 to 2019, due to the continuous expansion of production capacity by panel makers in mainland China, the oversupply of the panel market has intensified. Under the competition of price cuts by panel makers, panel quotations collapsed and profitability was weakened. In order to reduce operating pressure, the panel factory has passed part of the cost to the upstream supply chain, making the expansion plans including the polarizing plate factory and the glass substrate factory relatively conservative in the past few years.

However, as the panel industry ushered in the longest price increase cycle in history, the supply of upstream panel driver ICs was the first to become tight. In addition, with the recent global shortage of automotive chips, it is reported that foundries plan to convert some of the panel driver IC production capacity into automotive chips, which may make the supply of panel driver ICs even more in short supply.

Not only that, because of the lack of new production capacity for upstream panel materials in the past, there have also been reports of tight supply. Taking polarizers as an example, industry sources revealed that the production line remained fully loaded at the end of last year, but due to the shortage of upstream material compensation films for polarizers, it could not meet the needs of existing customers. The estimated gap is 15-20%.

Industry sources pointed out that the main suppliers of compensation film are Japan's Fuji, Konica, Zeon, etc. Among them, Fuji's annual repair work on a production line last year is expected to affect the global supply of 3 million square meters of compensation film per month, about 1/10 of the world. Demand. Although Fuji expects to resume production one after another at the end of March, it may result in a tighter supply of polarizers in the second quarter. Under the premise of Fuji's production capacity recovery, the global monthly production capacity of compensation film is about 27 million square meters, which is still 10% short of the monthly market demand of more than 30 million square meters.

In terms of glass substrates, the world’s three major glass substrate manufacturers, Corning, NEG, and Asahi Glass (AGC) factories have successively reported unexpected news since the end of last year. Although the impact on production capacity is limited, they have also prompted major panel makers to avoid future supply There is a gap, and the expansion of the pull, resulting in the continued tightness of the glass substrate.

However, reports say that there are no large-scale expansion plans for polarizing plate and glass substrate factories in the near future. The main reason is that the average time for new production capacity to be put into production takes 1 to 2 years, which cannot alleviate the existing tight supply and demand. In terms of prices, the relevant manufacturers also do not have any major adjustment plans along with the panel quotations. Only the polarizing plate manufacturer has reported that the price of the polarizing plate is adjusted by 5-10% in response to production capacity and exchange rate.

Looking to the future, the panel economy continues to improve, and the supply of upstream materials has become a topic for panel factories and a battleground for military experts. Among them, the continuous expansion of new production capacity by panel factories in mainland China and the delayed closure of LCD plants by Korean panel factories have put forward higher requirements for the stable supply of upstream materials.