Flat-panel and regular-panel makers will face a heavily oversupplied and expect a pricing by 2019 comes in, according to Morgan Stanley (a technology hardware research). The pressure of oversupply could come mid of 2019 up to end of third quarter of the year as international TV brands are to increase stocks for the year-end holidays.
Taiwan panel giants Innolux Corporation and AU Optronics Corporation may possibly be affected on the oversupplying of flat-panels. This is due to the Chinese manufacturers continues to add new capacities. The competition for panel makers have been to a high level specially to the demand of high technology society.
Innolux Corporation has 14 factory plants and rooted in Taiwan with its major plants located in Miaoli and Tainan that have complete range of 3.5G up to 8.6G production line and it offers advanced display integration solutions with a global ambition. The company has a total display solutions on a full range of large, medium, small LCD panels and touch control screen solution, also includes 4K and 2K ultra high resolution displays (with 8K display), AMOLED and OLED, IGZO and 3D displays. Innolux supplies many customers in consumer electronics manufacturers.
AU Optronics Corporation (Acer Technology and Unipac Optoelectronics) is also one of the global leaders in optoelectronics and display solution provider. Also rooted in Taiwan and spreading across overseas, AUO complete of production line from 3.5G to 8.5G with full range of panel size and have all types of display applications. AUO also provides green solution of solar modules, energy power plant service and platforms on energy management.
Expansion plans of BOE Technology Group Co, China Star Optoelectronics, CEC-IRICO and CEC-Panda from China will surely to see supply and outpace more demands by 2019 compared to 2018. The oversupply of large TFT-LCD panel will likely to increase in the first half of 2019, 2 times higher of supply than the second half of 2018.
The oversupply of stock means low volume of production since there is enough orders from customers and low production means less overtime and working time for some employees. Although both Innolux and AUO’s profitability will be affected, they may somehow dodge the oversupply of demands.
Especially AUO strong execution as it has upgraded its products and technology which the general public have turned on to thin bezel panel, 4K2K resolution display and ultra large products. This products are turning and developing on AUO’s favor. AUO would be great and defensive against the expansion of Chinese panel makers due its expansion discipline, flexibility and performance, according to analysts.
Forecast from the report that Innolux and AUO will still increase its earnings despite the effects of the panel prices. Innolux needs a product diversification and more business upgrade in order to cope in the coming years. The increasing demand of active matrix organic light emitting diode or AMOLED used in different smartphones is the only positive aspect to support both companies as silicon LCD panels are on downward pace.
Employees on both companies are still positive that they can achieve their goals and take a good competition in the growing panel manufacturing industry.
(Images credit to Google search)
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