Apr. 3, 2024 ---- An earthquake with a magnitude of 7.2 occurred off the eastern coast of Taiwan at 7:58 AM on April 3rd. Continuous aftershocks have left most machinery at AU Optronics and Innolux in a state of shutdown. According to the latest investigation by
TrendForce, all panel fabs at AU Optronics have suspended operations for inspections and repairs, and recovery efforts are now underway. As for Innolux, most of its fabs have experienced a noticeable impact from the earthquake in terms of equipment operations. The exception is Fab6, where equipment was just slightly affected.
Due to varying conditions across individual fabs, TrendForce estimates that this event will affect at least 1-2 days of production. Assuming the impact of the earthquake lasts for two days, it is projected that 1.2% of the overall production volume (measured in terms of surface area) will be affected. Furthermore, since many, if not most, panel fabs have experienced disruptions, all display application segments are expected to experience a reduction in production volume to some extent.
Given the current strong demand for TV panels, TrendForce projects that the overall capacity utilization rates for AU Optronics and Innolux will rise to 85% and 83%, respectively, in April. However, due to the recent earthquake, there is a possibility of further downward revisions.
Considering the supply situations across various application segments, fabs that primarily manufacture TV panels are already operating at near full capacity. Therefore, this earthquake is expected to impact shipments of some TV panels. Previously, TV panel prices were projected to continue rising into April. However, demand for small to mid-sized TV panels has started to weaken. Following the earthquake, TrendForce will continue to monitor the situation to determine if the price rally for small and midsize TV panels will extend into May. Nonetheless, TrendForce believes that the influence of Taiwan-based panel makers on TV panel prices has noticeably waned. Unless local panel fabs are forced to suspend operations for more than a week, the earthquake’s effect on TV panel prices is expected to be limited.
Regarding the market for IT panels, there has been a recent increase in stock-up demand for monitor panels. However, since some fabs have surplus production capacity, it remains to be seen whether this demand can be met as fabs return to normal production following the earthquake. Monitor panel prices have also shown a significant rebound recently. Consequently, TrendForce will continue to monitor the situation to determine whether the rebounding demand and prices, coupled with the impact of the earthquake on overall production capacity, will lead to a stronger price rally.
Regarding NB panels, the demand for them remains fairly weak at this moment, and panel makers have sufficient inventory to cope with this situation. Therefore, the effect of the earthquake on shipments of NB panels is expected to be rather insignificant. On the other hand, demand is expected to gradually pick up for NB panels during the second quarter. For panel makers who are eager to raise prices, the opportunity to push for hikes in NB panel prices by leveraging the impact of the earthquake on overall production capacity will be a major point of observation for the next one to two months.
Release Date: 31 October 2023
Language: Traditional Chinese / English
Format: PDF
Page: 153
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