Display panel shortages could lead to price hikes, low stock

[midian182]

TL;DR: We all know this season's big tech releases are almost impossible to find outside of eBay, but could monitors and other displays soon face similar problems? It's possible, and at the very least, we might see price hikes following an earthquake in Taiwan and a power outage in Japan that interrupted production.

As reported by Tom's Hardware, an earthquake that hit Taiwan last week impacted the production of leading LCD panel maker AU Optronics (AUO). Company chairman Paul Peng said (via DigiTimes) that it took "at least a few hours" to get the lines restarted, resulting in some output loss—though he never said how much.

TrendForce notes that foundries and memory makers in Taiwan acted quickly in pausing operations when the earthquake began, resuming work as soon as it was over. There has been no reported damage to their buildings or equipment.

I’m currently on the 17th floor of a building in Taipei - I really felt this earthquake, oof https://t.co/Z3smHYmaA1

— eileen chengyin chow (@chowleen) December 10, 2020

The earthquake compounded component supply problems in a display industry already suffering the effects of a power outage in Takatsuki, Japan. The five-hour incident on November 10 affected Nippon Electric Glass's (NEG) Shiga-Takatsuki plant, which manufactures glass substrates for flat-panel displays. The company says some equipment was damaged during the outage.

Tom's writes that NEG is responsible for around 10 percent of the world's glass substrate manufacturing capacity, and Peng believes it will take three to four months for NEG's operations to return to normal. One of its closest partners is LG, so we could see the South Korean firm's TVs, laptops, and monitors in short supply and their prices could rise.

There are already shortages of display components such as T-con boards and driver ICs, and with the additional production disruption, consumers could soon face the consequences. According to our price tracker, the excellent LG 38GL950G recently jumped back up to its highest price since launch, though it's unclear whether that's related to the supply issues.

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https://www.techspot.com/news/88023-display-panel-shortages-could-lead-price-hikes-low.html

 

[QuantumPhysics]

I am currently watching the Alienware 38 inch 4K gaming monitor which recently saw a price drop from $1900-$1400 and it’s only been on the market for a month. I think given another month it will drop to about $999.

I find it hard to believe there are display panel shortages because when I go to my nearby Microcenter the store is literally crowded with monitors.

In fact: I have four 1080 P Hewlett-Packard 19 inch monitors at home that I’m ultimately going to use to make my mother a extended display. But on top of that I have three monitors that were simply given to me by a business that didn’t need them anymore. Televisions are cheaper than ever and in larger sizes than ever before. I find it so hard to believe that there’s a shortage on monitors.

 

[Endymio]

I find it hard to believe there are display panel shortages because when I go to my nearby Microcenter the store is literally crowded with monitors.

Did you not read the article? The earthquake was only last week-- it'll take a month at least for any panel disruptions to trickle down to the retail level.

That said, I don't believe there will be a significant impact, if the reporting is correct that AUO suffered nothing more than a short-term power outage.

 

[Avro Arrow]

TLDR - This article is of extremely low quality because it fails to address the obvious BS. The earthquake has had literally no significant effect on production, these companies are trying to manufacture a shortage as an excuse to jack their prices. Rob Thubron had a golden opportunity to point out the obvious flaw in the logic of the article but decided instead to simply parrot someone else's BS. Great job looking out for your readers Rob! /S /S /S

My Long Analysis is as follows:

As reported by Tom's Hardware, an earthquake that hit Taiwan last week impacted the production lines of leading LCD panel maker AU Optronics (AUO). Company chairman Paul Peng said via DigiTimes that it took "at least a few hours" to get the production lines restarted, resulting in some output loss—though he never said how much

These corporations are such garbage. So one of the several makers of LCD panels lost a few hours of production time and you say that this will impact prices? Let's see what was actually lost:

I'll even be conservative and use a single 8-hour production shift of which 6 hours are used for actual production per day:
1 week = 6hrs x 5 = 30hrs
1 year = 30hrs x 52 = 1,560hrs
Take off two months for miscellaneous things (8 weeks):
1,560 - (8 x 30) = 1,320 hrs

So, assuming only one shift per day (there's probably two), the loss of, say three production hours could be taken as 3/1320 or 0.2% of that single manufacturer's annual production capacity. Since they're only 10% of the world's supply, this means that their output loss would account for 0.02% of global capacity if they only have a single production shift per day (which is, of course, extremely unlikely).

There's no way in hell that this is sufficient to qualify as a shortage or a reason to hike prices.

 

[Endymio]

These companies are trying to manufacture a shortage as an excuse to jack their prices.

It's a free market. Companies that wish to raise prices don't need an "excuse" to do so. They simply do it. No need for tinfoil-hat conspiracies.

My Long Analysis is as follows:

Your long analysis is even worse than your short one. Besides the obvious flaw that restarting a complex production line may require far longer than actual length of time power was interrupted, you've forgotten that none of these corporations has yet hiked prices, nor even suggested they may do so. Until then, you're simply bloviating.

Finally, may I suggest reading up on the economic concept of price elasticity. In a constrained market, a supply reduction of even a fraction of a percent can affect prices by a far greater amount. Not that I'm suggesting this will happen (quite the opposite, in fact) I'm merely demonstrating that your conclusion doesn't follow from your premise.

 

[brucek]

The key detail is at the bottom of the article. The five hour interruption with no damage mentioned up top does seem like a small impact. But if you made it all the way to the bottom, you finally get to the bigger deal: damage at the plant making 10% of the world's glass substrate, expected to take 3-4 months to return to normal. That sounds non-trivial.

 

[Avro Arrow]

The key detail is at the bottom of the article. The five hour interruption with no damage mentioned up top does seem like a small impact. But if you made it all the way to the bottom, you finally get to the bigger deal: damage at the plant making 10% of the world's glass substrate, expected to take 3-4 months to return to normal. That sounds non-trivial.

You're right, I didn't notice that (thank you for pointing it out) and I agree that it may be non-trivial to NEG. However, it's still only a fraction of 10% so if the plant is running at, say 70% capacity for a few months, that's only a 3% reduction. The other thing is this:

According to our price tracker, the excellent LG 38GL950G recently jumped back up to its highest price since launch, though it's unclear whether that's related to the supply issues.

Now, call me cynical if you want (because watching the tech industry for as long as I have would make anyone that way) but after Samsung, Hynix and Micron were all fined for RAM price-fixing it made me realise that these companies were a bunch of sleazeballs. Therefore, when a price jumps to its highest since launch and it's "unclear" as to why, I immediately assume that they're just gouging consumers.

It's not like companies haven't engaged in gouging consumers just for the sake of it countless times before because they obviously have. They're the largest part of the problem. However there is another component to this problem. It's smaller, but equally real. That's consumers who get fleeced over and over but are always so willing to believe the excuses that these corporations give and actively defend them against anyone who calls them out and with them are the journalists who seem unable to smell BS when it's in right front of their faces.

 

[brucek]

I'm not here to defend any price rises. And, if there were any, I'd expect them to settle reasonably quickly.

I do appreciate being informed about the earthquake and power failure, and I do believe that this may add up to a temporary disruption. Even if adequate supply is available from other vendors, there could still be time required to negotiate terms, qualify that supply, and integrate it into the manufacturing pipeline. There could be logistical challenges if the alternate supply is for example farther away, subject to new/different jurisdictional red tape, or countless other little gotchas that keep cube dwellers (like I used to be) busy and employed.

If it were me, and I knew I really wanted a monitor or TV in the immediate future, I might be tempted to grab what I need now especially if I saw it at a good holiday or post-holiday price.

In other news, my pool guy just told me there may be a supply crunch coming for chlorine tabs. Apparently there's one factory in the US that makes them, and it had a big fire. Of course pool chlorine is pretty much just bleach, and you can normally easily buy all of that you want, but since the pandemic that may not always be guaranteed either. Fun fun fun.

 

[Reehahs]

TLDR - This article is of extremely low quality because it fails to address the obvious BS. The earthquake has had literally no significant effect on production, these companies are trying to manufacture a shortage as an excuse to jack their prices. Rob Thubron had a golden opportunity to point out the obvious flaw in the logic of the article but decided instead to simply parrot someone else's BS. Great job looking out for your readers Rob! /S /S /S

My Long Analysis is as follows:

These corporations are such garbage. So one of the several makers of LCD panels lost a few hours of production time and you say that this will impact prices? Let's see what was actually lost:

I'll even be conservative and use a single 8-hour production shift of which 6 hours are used for actual production per day:
1 week = 6hrs x 5 = 30hrs
1 year = 30hrs x 52 = 1,560hrs
Take off two months for miscellaneous things (8 weeks):
1,560 - (8 x 30) = 1,320 hrs

So, assuming only one shift per day (there's probably two), the loss of, say three production hours could be taken as 3/1320 or 0.2% of that single manufacturer's annual production capacity. Since they're only 10% of the world's supply, this means that their output loss would account for 0.02% of global capacity if they only have a single production shift per day (which is, of course, extremely unlikely).

There's no way in hell that this is sufficient to qualify as a shortage or a reason to hike prices.

While that would be ideal but if equipment is damaged then things take a lot of time to fix.

 

[Lounds]

Yeah this is just another excuse to Jack prices.

 

[HardReset]

TLDR - This article is of extremely low quality because it fails to address the obvious BS. The earthquake has had literally no significant effect on production, these companies are trying to manufacture a shortage as an excuse to jack their prices. Rob Thubron had a golden opportunity to point out the obvious flaw in the logic of the article but decided instead to simply parrot someone else's BS. Great job looking out for your readers Rob! /S /S /S

My Long Analysis is as follows:

These corporations are such garbage. So one of the several makers of LCD panels lost a few hours of production time and you say that this will impact prices? Let's see what was actually lost:

I'll even be conservative and use a single 8-hour production shift of which 6 hours are used for actual production per day:
1 week = 6hrs x 5 = 30hrs
1 year = 30hrs x 52 = 1,560hrs
Take off two months for miscellaneous things (8 weeks):
1,560 - (8 x 30) = 1,320 hrs

So, assuming only one shift per day (there's probably two), the loss of, say three production hours could be taken as 3/1320 or 0.2% of that single manufacturer's annual production capacity. Since they're only 10% of the world's supply, this means that their output loss would account for 0.02% of global capacity if they only have a single production shift per day (which is, of course, extremely unlikely).

No no and no. You must understand that high tech manufacturing is no single process, it's multiple stage process. You just cannot make display unit with one machine like could be done on simple things.

Just to make things into perspective, manufacturing complex die on 7nm TSMC process takes about 4 months and has at least 20 manufacturing stages. Numbers below are just for example.

Display manufacturing have 10 manufacturing stages. Different things are done on each stage. Total cycle time is 30 days and one stage takes 3 days.

Now, if power outage happens, it's possible that everything produced on ALL those 10 lines are trash. It's possible that not everything on all stages are not on production same time but even that is possible. That could mean, on worst case scenario, that 30 days on production is trashed. That's unlike but we are not talking about that small numbers here.

 

[Avro Arrow]

If it were me, and I knew I really wanted a monitor or TV in the immediate future, I might be tempted to grab what I need now especially if I saw it at a good holiday or post-holiday price.

That's a very good point. This might just be a marketing stratagem to increase sales before the end of the year to make 2020 look as good as possible what with the pandemic probably hurting this industry as well.

In other news, my pool guy just told me there may be a supply crunch coming for chlorine tabs. Apparently there's one factory in the US that makes them, and it had a big fire. Of course pool chlorine is pretty much just bleach, and you can normally easily buy all of that you want, but since the pandemic that may not always be guaranteed either. Fun fun fun.

You know, it's funny. I have a certificate from the PMAC (Purchasing Management Association of Canada) and I absolutely HATE "Just-in-Time Delivery" because it's so unstable. I much prefer what I like to call "Just-in-Case" inventory. In that case, charging a bit more is warranted because of the extra costs of holding the extra inventory, especially when it comes to small-ticket items like chlorine tabs.

On the other hand, how's the availability of bromine tabs?

 

[Avro Arrow]

While that would be ideal but if equipment is damaged then things take a lot of time to fix.

It stated specifically that while NEG suffered some damage, AUO did not. The Pacific Rim has had earthquakes since the dawn of time and the Taiwanese are some of the most clever people you will ever meet. I'm sure that the damage is being overblown because all of their buildings are made to withstand earthquakes. In any case, I don't see it being that big of a deal.

Now, the Tsunami hitting Malaysia and causing a shortage of hard drives was a completely different story because there's not really a good way to safeguard against a Tsunami.