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Capacity issues ahead for TFT-LCD glass substrate suppliers

Post Time:Nov 03,2008Classify:Industry NewsView:360

Austin, Tex. — Sales of glass substrates to TFT-LCD producers may grow only 4% year-on-year (Y/Y) in the fourth quarter of 2008, according to DisplaySearch. This is primarily due to capacity reductions by TFT-LCD manufacturers to compensate for falling panel prices in the second quarter of 2008.

DisplaySearch's Quarterly LCD Glass Substrate Report for the third quarter of 2008 compares this growth to the 31 percent Y/Y growth in the fourth quarter of 2007, before TFT-LCD manufacturers began adjusting capacity utilization to compensate for decreasing prices.

DisplaySearch also reported that capacity reductions began earlier in this business cycle than in previous ones, and the impact on glass suppliers was sudden and unexpected. Glass suppliers responded by reducing their glass foundry utilization and adjusting prices. The result: substrate area shipments are increasing, while sales revenues are increasing at a slower pace.

The report indicates that Corning (including its Samsung Corning Precision Glass joint venture in Korea) remained the largest supplier in terms of substrate area capacity, but its share is down slightly. Asahi Glass (AGC) capacity share increased two points Y/Y as it prepared to meet future requirements in Japan, where Panasonic and Sharp plan new TV panel plants. See related chart.

"Corning plants have nearly two-thirds of glass substrate capacity in Taiwan, so utilization reductions by Taiwanese TFT-LCD companies impacted Corning more than other suppliers," said David Barnes, DisplaySearch's vice president of strategic analysis in a statement. "Fortunately, utilization reductions by Korean panel makers were less severe and demand for Samsung Corning Precision glass was stronger," he added.

DisplaySearch said challenges are still ahead for glass suppliers because total demand keeps growing. In the first half of 2008, substrate area shipments increased 47% over the first half of 2007, but capacity increased only 37%.

Source: EETimes Supply NetworkAuthor: shangyi

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