Constant supply constraints in key components used in computer and television flat-panel displays may ease the growing pressure of an overcapacity-driven glut in the first half of next year, a local researcher said yesterday.
Liquid-crystal-display (LCD) panel makers have been suffering from the tight supply of key components since the second quarter of this year, especially cold-cathode fluorescent lamps (CCFL), amid recovering demand for the sleek screens, the government-funded Industrial Technology Research Institute (ITRI) said.
Lamp supplies will lag behind demand by 13.17 percent in the current quarter and by nearly 6 percent in the first quarter of next year due to the slow capacity expansion of lamp suppliers, ITRI analyst Yeh Yang-jer (
Looking at the bright side, however, "the oversupply of flat panels may not be as severe as some market researchers thought, as persisting tight component supply will slow the panel production," Yeh said.
He said panel supply would exceed demand by less than 10 percent for the first quarter after South Korean and Taiwanese companies ramp up their new plants.
The ITRI analyst expected the supply constraints will not ease until the third quarter of next year, but would start to tilt toward a supply crunch in the final quarter.
Still, he said the lamp supply forecast for next year is the best scenario.
In addition to the lamp, the supply of triacetyl cellulose (TAC) films also can not match demand and the situation would last through next year, Yeh said.
AU Optronics Corp (
Taiwanese LCD panel makers rely on Japanese firms, including the world's top lamp supplier, Harison Toshiba Lighting Corp, for lamp supplies, Yeh said.
To ease the supply crunch, AU Optronics bought into local lamp maker Wellypower Optronics Corp (威力盟) while Chi Mei Optoelectronics Corp (奇美電子) set up a new firm to manufacture its own lamps.
"Taiwanese companies are not the only ones facing a component shortage. Their Korean rivals have similar problems," Yeh said.
But the world's two biggest LCD panel manufacturers, LG Philips LCD Co and Samsung Electronics Co, are better positioned to cement stronger ties with their component suppliers, Yeh said.
Samsung Electronics set up an LCD glass manufacturing joint venture with the world's biggest glass supplier, Corning Inc, to secure sufficient supply, he said, while LG Philips joined forces with Japanese glass maker Nippon Electric Glass Co Ltd.
Local companies have said they paid Corning, their major glass supplier, to guarantee their glass supplies last year.
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