El Segundo, Calif. - The 6.4 magnitude earthquake that struck
Taiwan today has suspended
production of large-sized LCD panels in the country's Tainan Science Park
area due to safety reasons, according to a report from iSuppli.
While not all of their production facilities were shut down, the
panel suppliers known to be impacted by this production stoppage accounted for
16.4 percent of global shipments of large-sized LCD panels in January, iSuppli
The earthquake has caused Taiwanese firms Chi Mei Optoelectronics
(CMO) and HannStar Display to temporarily stop manufacturing large-sized LCDs
at their Tainan
fabs. In January, CMO was the world's fourth-largest producer of large-sized
LCD panels, accounting for 13.3 percent of global unit shipments, iSuppli said.
HannStar was the seventh-largest producer, with a share of 3.0 percent.
It is unclear whether operations at No.-3 supplier AU Optronics (AUO)
have been affected by the earthquake. AUO of Taiwan in January accounted for
17.5 percent of global shipments.
"The Taiwan earthquake could have strong impact
globally on large-sized LCD panel supply, depending on how quickly production
is resumed at the Tainan
facilities," said Sweta Dash, LCD research senior director at iSuppli.
"After a shutdown, it typically takes 12 to 24 hours before
production can be restarted at an LCD manufacturing fab. However, if there is
damage to the equipment, the shutdown will last for a longer period of time.
The results of the damage inspections by CMO and HannStar will be critical to
determining whether production will be halted at their facilities for a longer
period of time," Dash said in an iSuppli report.
If the halt in production continues, the global LCD market could
face shortages of large-sized panels. CMO produces all sizes of LCD panels used
for televisions, desktop PC monitors and notebook PCs. HannStar, which focuses
on displays for netbooks and monitors, also produces small-sized panels.
The production disruption comes at a time when shipments are
typically slow, supply is starting to exceed demand and inventories are
increasing in the retail channels due to slower than expected sales in January
and February. iSuppli's forecast issued before the earthquake predicted that
global shipments of large-sized LCD panels would decline 5.5 percent in the
first quarter compared to the fourth quarter of 2009.
The earthquake also has halted Tainan's production of glass, the main
component used to make LCD panels.
Avanstrate, a small supplier that accounts for about 5 percent of
global glass supply, operates five glass-melting tanks in Tainan. Initial
reports indicate severe damage at one of the company's tanks.
Leading global LCD glass supplier Corning
said there was no damage to its Tainan LCD glass operations and that all
glass-making operations recovered within hours and now are running normally.
iSuppli said it will continue to monitor the situation to
evaluate the impact on global LCD and glass supply.