(OT) Shortage of LCD Panels Intensifies
nikkeibp.asiabiztech.com
April 1, 1999 (TOKYO) -- Amid the ongoing spring sales campaign in Japan, many
NEC Corp., Fujitsu Ltd. and Sony Corp. notebook personal computers are being
showcased at PC retailers with tags saying the stores do not know when they will
receive shipments.
Personnel at major PC retailers said popular notebook models and desktop models
with liquid crystal display (LCD) monitors come in once a week at best, and these are
sold out in a weekend.
The major cause for that is a short supply of thin-film transistor (TFT)-LCD panels.
PC makers are lamenting over the current situation. Compaq Computer KK said, for
instance, that it cannot procure sufficient quantities of TFT-LCD panels for its certain
series, and Toshiba Corp. said it cannot place additional orders with TFT-LCD makers
to boost its PC production.
The short supply of TFT-LCD panels has intensified since the fall of 1998, and some
PC makers are being compelled to revise their production plans. A PC maker said it
decided to use 10.4-in. TFT-LCD monitors instead of 11.3-in. TFT-LCD monitors for its
B4-sized notebook PCs because of supply problems.
Expanding demand together with short supply is pushing up the prices of TFT-LCD
panels after a sharp plunge in the prices took place from 1997 to 1998. Panel makers
raised prices about 15 percent during the period from the end of 1998 through the first
quarter of 1999 to recover exchange losses due to current highs in the yen. The prices
are likely to increase by about the same margin after the second quarter of the year,
because panel makers want to bring the TFT-LCD business back into the black, said
Hiroyuki Yoshida, research manager at IDC Japan Ltd.
According to a survey conducted by DisplaySearch of the United States, the prices of
13.3-in. TFT-LCD panels soared from US$350 to US$440, and the prices of 12.1-in.
TFT-LCD panels from US$225 to US$330, between the fourth quarter of 1998 and the
second quarter of 1999.
Currently, PC makers such as NEC and Toshiba, said they cannot directly add the
increased amount of money onto the prices of PCs. However, it will be impossible to
absorb the cost increase by reducing the costs of other component parts, if it comes
to more than US$100. In this case, they will need to review their price strategies,
industry sources said. The price increases in TFT-LCD panels may keep PC makers
from maneuvering against their competition with discounts.
How long will the imbalance of supply and demand in TFT-LCD panels continue?
Many people in the industry expect it will continue through 2000.
TFT-LCD panel makers in Japan and Korea have cut their investments following
deteriorated earnings due to the previous plunge in prices, and therefore, they cannot
boost their output substantially at present.
Taiwan-based emerging market entrants expected after the summer of 1999 are the
industry's last hope. However, they will not have a great impact on the market,
because only Chung Hwa Picture Tubes Co., Ltd. and Acer Group can start
mass-producing TFT-LCD panels in 1999, Yoshida said.
Some market observers said Korean TFT-LCD panel makers may resume investments.
However, the short supply will not be relieved until 2001, when three additional
Taiwan makers are slated to start mass production after entering the market in 2000,
Yoshida said.
(Nikkei Personal Computing) |
