The shortage of panel leads to contract disputes, and the manufacturers make great efforts to pursue materials and deliver goods

LCD panel has changed from a long-term oversupply to an instant shortage of supply. Recently, many unprecedented problems have emerged in the supply chain, including Corning and SDP, which have cooperated for more than 10 years. This time, there was a contract dispute due to the shortage of glass substrate. This shows that the manufacturer is making great efforts to meet the needs of customers in order to pursue materials and deliver goods.

A sudden epidemic has triggered housing economy and long-distance demand. The panel price has started to turn over since the second half of 2020. After six months of continuous rise, it will continue to rise in November. It is estimated that the rise will continue in December. However, in response to the demand of channel customers, the increase slightly converges and the trend turns to slow rise pattern.

But even so, panel demand still exists. With the overall inventory level still low, the supply chain is still actively pulling goods, and the demand is expected to continue until 2021.

This wave of unprecedented panel shortage has delayed the closure of Korean panel factories Display; LGD) originally planned to end the LCD TV panel production line in South Korea by the end of 2020. However, in view of the market situation that the overall large-scale panel is in short supply, LGD has shifted its strategy, planning to convert more TV panel production capacity into it panel, but will continue to produce TV panel.

It is reported from the industry that LGD is expected to close its 7.5-generation factory, which is tentatively postponed for one year to the end of 2021. As for Samsung display, which has a more firm attitude towards OLED development, it plans to withdraw from the LCD industry before 2020. However, due to the strong demand for TV and it panels in the second half of the year, it is expected to postpone the closing time to March 2021.

Although Samsung display and LG display both delay the withdrawal from LCD market, the supply of TV panel in 2021 will continue to decrease, so the impact on the overall supply and demand is limited. At present, it seems that the panel demand will continue until 2021.

Because of the shortage of panels, many unprecedented problems have arisen recently. For example, China's panel agents have recently sent a message that they will not receive orders and will only ship after receiving full payment, which highlights the seriousness of this wave of panel shortage.

According to a contact letter sent by an agent in Shenzhen, "since the epidemic, the global demand for LCD in home epidemic prevention Office has been soaring and continues, and panel prices have been rising. Affected by the upstream supply chain, LCD panels and IC materials are in serious shortage, which can not be changed in the short term. In response to this, the agent sent a message of not receiving orders.

In addition, some agents issued price adjustment notices, pointing out that "due to the recent shortage of chips, the supplier's motherboard, display screen and touch panel have continued to rise in price, but they are still seriously out of stock. Considering the rising production costs, the company adjusted the prices of its series of products, including 7-inch, 8-inch, 9-inch, 9.7-inch and 10-inch products, and raised the price by 30 yuan per set.

At the same time, the agent also stressed that no oral orders will be accepted from now on, subject to full payment. At the same time, it shows that the lead time may be delayed due to the shortage of raw materials. In the future, the corresponding price will be adjusted according to the actual cost of raw materials.

In the face of this wave of serious shortage of panels, upstream components and materials are also in short supply. In addition to driving IC shortage, polarizing plate and glass substrate are also in short supply. The prices of some products of polarizing plate have risen in the fourth quarter of 2020, and it is expected that the price will rise again in the first quarter of 2021.

As for glass substrate, it is also because of the shortage of supply, which leads to contract disputes between supply chain operators. Sharp's display products (SDP) registered under the equity law of sharp applied to Osaka Prefecture court of Japan for false punishment on 26th due to the purchase problem of glass for LCD panel, requesting the Japanese legal person of Corning, a US special glass giant, to stop its breach of contract. SDP accused Corning of violating the contract by selling glass for panels made in the factory to other customers suspected of Chinese enterprises without consent.

Corning issued a statement on this, saying that it has not received any legal notice or documents related to the matter, nor can it confirm whether there is a lawsuit filed, but it indicates that any claim of non performance of contract obligations mentioned in SDP is groundless. In this regard, SDP issued four more statements, stressing that it should return to the facts and expect Corning to return to abide by the contract.

The cooperation between Corning and SDP has lasted for more than 10 years. Corning is also the first manufacturer in the world to develop 10 generation large-scale TV glass substrates for SDP. The cooperative relationship between the two sides is beyond description.

This contract dispute between the two sides not only shows the seriousness of the panel shortage, but also shows that the manufacturers are making great efforts to solve the problems of material recovery, material consolidation, delivery and shipment, and the ultimate goal is to achieve the mission and meet the needs of customers.

Although supply exceeds demand and supply exceeds demand is painful, from a business point of view, it is much better than oversupply. At least, there are opportunities for prices and profits to rise. For most of the operators, there is still a chance to continue to feel the pain and happiness in 2021.

Source: Science and technology network