Panel Industry Under The Epidemic: Short Term Shortage Of Raw Materials Has Limited Overall Impact.

In February 10th, many enterprises resumed labor resumption day. However, for the panel industry, due to the special process, its factories are basically closed throughout the year. Therefore, during the Spring Festival, the panel factory also works continuously.

The epidemic affected the upper and lower reaches of the panel. Especially in Wuhan, there were three production lines, namely, BOE, TCL Huaxing and Shenzhen Tianma, which had 5 production lines. Many people in the industry say that in the short term, we are worried about the shortage of raw materials. We all hope to resume work in an orderly way and reduce the impact.

Li Yaqin, general manager of QQ consulting, told the twenty-first Century economic report: "at present, panel makers are still using safety stock to turn around. Most of the panel manufacturers have not stopped work because of material problems, or are going to make a big downdraft of crop rate, except for factories in Wuhan."

At the same time, she also said that the need to observe the resumption of No. 10 situation, "if all parts of the 10 can be resumed as scheduled, logistics can also be improved, we believe that the problem of supply chain will gradually ease. But if the recovery is not very good, we need to be cautious. "

Epidemic impact is limited.

In this impact, the first thing to bear is the 5 production lines in Wuhan. How are they affected?

Among them, the 10.5 generation of LCD production line in BOE in December 2019 is still in the climbing stage, so the original output in the first quarter is less, and the impact on the overall TV panel is also small.

According to CCTV news recently, Chen Yanshun, chairman of BOE technology group, said: "so far, BOE has recovered about 75% of its production. In the first quarter, the output value of BOE will probably exceed 30 billion yuan, a slight increase over the same period last year.

Zhang Hong, director of TV research at QQ consulting, told the twenty-first Century economic report: "the production line is in a state of maintaining basic operation and maintaining low crop rate, but the impact of supply and demand on the overall TV panel is relatively small. According to our current confirmed situation, the impact of the epidemic on this line has dropped compared with the original plan, with a decrease of 15%.

"The product is mainly 65 inches, because the production line is in the climbing stage, and in the process of importing customers, it has not yet achieved large-scale delivery, so the impact on customers is also very small." Zhang Hong also said.

Look at the two production lines of TCL Huaxing, T3 is the LTPS LCD production line, and T4 is the flexible OLED production line. According to the TCL announcement, TCL Huaxing produces T3 and T4 factories of small and medium size products in Wuhan. During the Spring Festival, the production and operation of the products are planned, and the delivery channel of finished products is normal. TCL stressed that at present, the company material inventory can meet the current production needs, but affected by the epidemic, part of the production material supply may be delayed due to factors such as suppliers' delay in reemployment and poor logistics. The company has been actively promoting the entry of materials on demand by actively coordinating logistics channels and negotiating with strategic suppliers.

Li Yaqin analyzed: "TCL Huaxing's T3 production capacity is relatively large, at present, the full production can go to 50K for a month's investment, but we expect that its February crop rate should be reduced, maintaining at around 3. The shipment volume in the first quarter is expected to be reduced by 7 million, almost half of the original plan.

However, Li Yaqin said: "the impact of this production line is not particularly big for the whole market, because the demand for the whole LTPS panel is estimated at 120 million in the first quarter, even if the loss of 600-700 million shipments is equivalent to 10% of the global demand in the first quarter. And we also consider that the first quarter is the off-season of the mobile phone market. The overall LTPS panel is basically not full, including the LTPS production line like BOE and auto, but in fact, there is no full production.

T3's customer structure is mainly focused on brands like HUAWEI and millet. If the T3 capacity is reduced, other panel manufacturers will benefit. The T3 flexible OLED production line has just been mass-produced, but it has not had a significant impact.

Deep Tianma also has two production lines in Wuhan. Li Yaqin told reporters that "the 4.5 generation of a-Si's LCD is mainly for industrial control, vehicle mounted and low-end mobile phones. The other 6 generation AMOLED production line has a very low rate of crop growth, with less than 5000 volumes of input per month, and no large number of customers. At present, maintaining the basic operation of the production line has little impact on the whole market. "

Shenzhen Tianma announced in February 4th that part of Wuhan Tianma Microelectronics Limited has some pressure on raw material supply. Judging from the current situation, the company's material inventory can meet the current production needs. The company has also been actively coordinating the logistics channels, negotiating with suppliers, and applying support to relevant departments, so as to ensure the follow-up of raw materials on demand.

As a whole, the panel factory has a certain period of stock to resist risks. Reflecting the price of the panel, QQ consulting predicts that the size of the TV panel will be slightly higher than expected in February because of the epidemic, which is likely to extend to the first half of March. The price of small size mobile phone panels is basically flat, and AMOLED's right to speak is also mainly in the hands of Samsung.

Raw materials and terminal risks

At the same time, the two challenge faced by panel makers is that on the one hand, some raw materials are in short supply; on the other hand, sales of downstream televisions, mobile phones and other terminals are down.

Zhang Hong told reporters: "according to our preliminary investigation, the shortage of materials is mainly occurred in the back section of the panel factory, mainly PCB, polarizer and consumables. Most of the auxiliary materials are directly purchased from mainland China."

"Among them, the Hubei area is the main city of PCB, and many PCB manufacturers are gathered. PCB is a personnel intensive enterprise. Therefore, the delay in start-up will have a great impact on the capacity of these manufacturers." Zhang Hong explained in detail: "the polarizer in mainland China has been very mature. Many polarizing factories have been gathered in East China and Southern China. Due to the time delay, the shipment of polarizer has a very significant effect. Other consumables, such as some packaging materials, structural parts, and so on, also because of the delay in reemployment time has brought the risk of short-term supply shortage.

Therefore, for the panel plant, although the crop movement rate in the preceding period has not been lowered, because the production of the latter section is affected by the shortage of labor and materials, it will have a certain impact on production and shipment. In Zhang Hong's view, if we can resume work normally around February 10th, the impact on the panel plant will be relatively limited, mainly on the postponed delivery date, but the impact on demand will be even more profound.

According to the data of QQ consulting, it is estimated that the number of shipments of LCD TV panels in the first quarter of 2020 will drop by 10.1% compared with the same period last year. It is expected that the total volume of LCD panels in the first quarter will be reduced by about 1 million units in the first quarter.

The mobile phone panel market also showed a similar situation. The first quarter is often the off-season, plus the impact of the epidemic, the major consulting companies also give a forecast of the decline in mobile phone sales in the global market. Strategy Analytics predicts that the global smartphone shipments will be 2% less than expected in 2020. Shipments of Chinese smartphones will be reduced by 5% than expected. Among them, the shipments of China's smart phone market will decline more than 30% in the first quarter of this year.

Li Yaqin said: "from last year's fourth quarter, in fact, many mobile phone brands began to adjust inventory, especially in HUAWEI, for example, obviously adjusting inventory."

In addition, we can see that the first quarter is the off-season, but under the influence of the epidemic, the mobile phone shipments in the entire Chinese market are expected to decline by 28% in the first quarter, and the two quarter will continue to decline, which may improve slightly in the three quarter. "

She also pointed out that the panel factory should pay attention to the decline of terminal demand. "The panel factory may not feel it at the moment, and there is a lag stage in the final conduction to the upstream. The faceplate factory really needs to consider how to balance the supply chain, balance the capacity, and then make a balance and match with the demand, which is a test of the wisdom of the panel factory.

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