Shares of LCD panel makers AU Optronics Corp (AUO, 友達光電) and Innolux Corp (群創) yesterday rallied by almost the 10 percent daily limit in Taipei, one day after South Korean panel maker Samsung Display Co said it would cease all production of LCD panels by the end of this year.
Samsung Display’s exit would breathe new life into the volatile LCD industry, as the cutback in supply would help mitigate a prolonged oversupply of LCD panels, market researcher TrendForce Corp (集邦科技) said in a report yesterday.
The industry has been locked in a long-term downward spiral in panel prices due to a persistent supply glut.
The South Korean firm’s move indicates that it is speeding up production of quantum dot and organic-LED displays, a hybrid panel developed by Samsung Display, TrendForce said.
The researcher said it had expected a severe glut in the supply of monitor panels this year — similar to what happened with TV panels last year — pushing global shipments of LCD monitor panels to 1.7 million units, up 18.3 percent from 1.44 million units last year.
“Now that Samsung Display has decided to withdraw from the LCD market earlier than expected, it will help alleviate the market’s oversupply pressure,” the Taipei-based researcher said.
AUO and Innolux shares rose 9.94 percent each to NT$6.97 and NT$5.75 respectively in Taipei trading.
They have slumped more than 30 percent this year amid a gloomy outlook due to the COVID-19 pandemic.
Samsung Display’s exit might cause supply constraints regarding vertical-alignment (VA) LCD panels for monitors, as the firm is the world’s No. 1 supplier of such panels with a 35 percent market share, TrendFroce said.
AUO and China Star Optoelectronics Technology Co (華星光電) would become the world’s only two suppliers of VA monitor panels, before HKC Optoelectronics Technology Co (惠科) starts ramping up a new production line next year in China, the researcher said.
Samsung Display’s move is also expected to bring a supply-demand parity for in-plane switching LCD panels at a time when major manufacturers, including LG Display Co, BOE Group Co (京東方) and Taiwanese companies, are expanding capacity by adjusting existing equipment, TrendForce said.
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