LCD panel makers are likely to face a bumpy ride next year as the global LCD industry is to enter the biggest capacity growth cycle in five years due to significant capacity expansions from Chinese manufacturers, TrendForce Corp (集邦科技) said yesterday.
Worldwide LCD capacity is expected to outgrow demand by 8.5 percent next year, indicating a supply glut, the Taipei-based researcher said.
“LCD companies should brace for a difficult time in the first half of 2018 as price pressures will increase on a supply glut during the slow season,” TrendForce display research division vice president Eric Chiou (邱宇彬) said.
TrendForce predicts supply might exceed demand by 14.9 percent in the first quarter next year, Chiou said.
BOE Technology Group (京東方), China’s biggest LCD panel maker, plans to ramp up its first 10.5-generation factory at end of the first quarter next year, while two of China Electronics Panda Crystal Technology Corp’s (中電熊貓) 8.6-generataion production lines will begin mass production in the first half of next year, Chiou said.
Most of the new factories are designated to produce 65-inch LCD TV panels, but the capacity expansion will prompt a price decline for the panels, he said.
Even so, Chiou expects LCD panel makers to continue making profits in the first quarter on improving cost efficiency, with operating margins holding at about 12 percent.
Commenting on Foxconn Technology Group’s (富士康科技集團) new fab plan through Sharp Corp, Chiou said that the group might postpone mass production at a 10.5-generation plant in Guangzhou, China, from 2019 to 2020, citing slow progress.
It is a remote possibility that Foxconn will start building its first flat panel plant in Wisconsin any time soon, he said.
Foxconn has not placed any lithography equipment orders from Nikon Corp, the world’s sole supplier of the key LCD manufacturing equipment, he added.
As Nikon has an order backlog until 2019, it will be difficult for Foxconn to receive any lithography equipment before 2020, Chiou said.
Instead, Foxconn might first build LCD TV assembly lines in the US to help its clients, including Sharp, to expand their market share in North America, Chiou added.
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