Affected by the power outage at the Japanese panel factory, large-size panels will continue to be expensive next year

Recently, NEG, a global glass substrate manufacturer, had to suspend operations at its glass factory in Takatsuki, Japan due to an unexpected power outage of 5 hours, which caused the temperature of the production line to drop suddenly, resulting in serious damage to its 3 furnace plants and 5 feed troughs.

TrendForce's Display Research Division said that even if production capacity is gradually restored, the incident will still cause a 2.5% shortage of large-size glass substrates in the first quarter of 2021. The large-size panel market has been in short supply for half a year, and due to this sudden situation, quotations will continue to remain high in the first quarter of next year.

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It is reported that the plant mainly supplies glass substrates below 8.5 generations. According to NEG's estimates, its three furnace plants are expected to be repaired and resume production in the first quarter of 2021, and the overall impact time may be as long as 4 months.

At present, the Takatsuki plant has stopped production, and it is expected that the supply of glass substrates will reduce by 4-5 million square meters in the next month. If calculated based on the area of ​​8.5-generation glass substrates, this is equivalent to a reduction of 100,000-150,000 pieces of glass substrate production capacity per month, which is equivalent to the reduction of the production capacity of an 8.5-generation plant!

TrendForce indicates that TV panel quotations had been gradually entering a plateau period, but the NEG incident not only revived market concerns about the widening gap between supply and demand, but also made panel manufacturers more optimistic about quotations. The average increase in TV panel quotations in December will slightly increase from the originally estimated 2~3% to 4~5%.

Looking ahead to the first quarter of 2021, as the NEG glass supply shortage problem is brewing, TV panel prices have the opportunity to reverse from the originally expected flat trend to a small increase.

The analysis pointed out that the short-term turbulence in glass supply does provide the basic conditions for another sharp rise in TV panel prices. However, looking at the current situation, the sharp rise in panel prices means that the losses of brand customers will continue to expand, which is not conducive to maintaining the long-term relationship between panels and customers. In addition, TV panels can already bring abundant profits to most panel manufacturers. Therefore, it is judged that panel manufacturers will replace sharp increases with a gradual increase in prices to achieve a balance between shortages, profits and maintaining customer relationships.

In terms of desktop monitor panels, the products affected by NEG glass supply are mainly IPS and entry-level 19.5-inch TN products. TrendForce believes that the quotations of these specifications do provide a reason to increase the price range. However, for this month's quotations, most panel manufacturers are currently prioritizing the degree of impact and will not make more changes to the quotations for the time being. Therefore, the price increase is roughly similar to that in November, at about 2~4%.

According to the information TrendForce currently has, the impact of the NEG incident on notebook panel production is less than that on TVs and desktop monitors. The impact on current quotes remains to be observed, and the view that the December increase will be 3~4% is still maintained. Then, whether panel manufacturers may schedule different products with limited glass substrate resources, resulting in indirect sacrifice of notebook panel production, may further form a notebook panel gap, and increase the increase by another 1~2%.

According to public information, NEG was founded in 1949 and is a world-renowned manufacturer of special glass, with its head office located in Otsu City, Shiga Prefecture, Japan. NEG's products are not limited to pharmaceutical containers, but are also widely used in display screens, electronic products, optical lenses, electrochemical products, fiberglass, and construction.

At present, there are hundreds of types of NEG glass materials, such as glass tubes, flat glass, glass fiber, pressed products, blown products, precision molded products, powdered glass, etc., with rich and diverse forms.

It is worth noting that although the supply gap of glass substrates is not as large as that of ICs, there are only a few glass substrate suppliers. Currently, the world's major TFT LCD glass substrate suppliers include Corning of the United States, Asahi Glass of Japan, Nippon Electric Glass (NEG) and NHT.