Taipei, Friday, July 25, 2014 08:32 (GMT+8)
partly cloudy
Taipei
28°C
Digitimes Insight: Japan LCD component supplies see minimal impact from quake
Jason Yang, DIGITIMES Research, Taipei [Friday 18 March 2011]

As the epicenter of the magnitude 9.0 earthquake that struck off the coast of Japan on March 11, 2011 was located close to the northeastern prefecture of Miyagi, the local area has suffered catastrophic damage. But Miyagi is located some distance from the areas where Japan's panel industry is concentrated. As Japan's TFT LCD factories and component plants are mostly located in central and southern Japan, Digitimes Research believes the recent earthquake is not predicted to have a major impact on the majority of key panel component suppliers in Japan.

Factories located in areas where the magnitude of the earthquake was relatively high (5-lower or above, according to the JMA seismic intensity scale used in Japan) include the Asahi Glass (AGC) plant in Yonezawa; Hitachi and IPS Alpha's plants in Mobara, Chiba (3.8G, 4.5G and 6G); NEC's 3G plant in Akita; DNP and Toppan's old color filter (CF) production lines; Fujifilm's LCD optical film plant; and the former CF factory of Andes, which was subsequently reorganized under Japan's Civil Rehabilitation Law to become a glass touch sensor plant.

The more seriously affected TFT LCD panel factories include Hitachi and IPS Alpha's plants in Mobara, Chiba and NEC's 3G plant in Akita. But these facilities all essentially consist of older production lines. While Hitachi remains one of the main global suppliers, the majority of the other panel production lines have already been demoted to second or third tier plants. The earthquake is therefore not anticipated to have a major impact on global panel supplies.

Turning to glass substrates, Corning's Japan facilities and Asahi Glass (AGC) have been fortunate, as both have indicated that the earthquake has had little or no impact on their factories. Corning had already been forced to rely on Corning Taiwan's factories to supply glass substrates following stoppages at its Shizuoka plant caused by a previous earthquake.

The glass substrate factory hit hardest was the Asahi Glass (AGC) plant located in Yonezawa, Yamagata Prefecture, where seismic intensity was rated at 5-upper; however, production has not stopped at the plant. Asahi Glass has indicated that although the earthquake has resulted in production stoppages at its Kashima, Keihin and Chiba plants, there has been no major damage to any of the firm's own factories. Corning's factory in Shizuoka Prefecture was subjected to a seismic intensity of four; the company has indicated that the recent earthquake has had no effect whatsoever on this factory.

The earthquake may prove to have a more serious impact on TAC film, a key component of polarizers, as Fujifilm's polarizer TAC film plant in Minamiashigara, Kanagawa Prefecture is located in an area where the earthquake's intensity was rated at 5-lower (JMA scale). Japan's two largest manufacturers account for more than 90% of global TAC film supplies. However, as Fujifilm, the largest manufacturer, has significantly expanded capacity at its facilities in Kumamoto Prefecture on the island of Kyushu, and the number two supplier Konica Minolta has already completed the construction of its new factory in Kobe, the overall effect on supplies is still projected to remain within manageable levels.

Supply of anisotropic conductive film (ACF), which bonds driver ICs, has not seen much impact from the earthquake. Hitachi Chemical and Sony Chemicals account for a total of 90% of the global ACF market. Their major ACF facilities in Japan were not damaged in the quake but were temporarily shut down due to power outages. If power shortages prolong in Japan, their production may be affected.

It is worth noting that the earthquake may have a more serious impact on DNP's CF factory located in Kazo, Saitama Prefecture, where the earthquake's seismic intensity was rated at 5-lower. Toppan's CF factory in Niiza, Saitama Prefecture was also hit with a seismic intensity of 5-lower. Fujifilm's polarizer TAC film plant in Minamiashigara, Kanagawa Prefecture is located in an area hit with a seismic intensity of 5-lower, and may also be more seriously affected.

Earthquake impact on Japan's LCD component industry

Component

Impact

Panels

The major panel factories are located far from the epicenter of the earthquake, and the overall effect has been small.

Sharp's 8.5G and later generation TFT LCD panel factories have all been designed with enhanced earthquake protection.

Glass substrate

The two largest manufacturers Corning and AGC have indicated that there has been little or no impact on their facilities.

Color filter

As factories in many countries source color filters domestically, the global impact on this sector will be small.

Optical film

Fujifilm's TAC film plant in Minamiashigara, Kanagawa Prefecture was subjected to a relatively high seismic intensity.

However, Fujifilm has significantly increased capacity at its other plants, which will reduce the impact on its supplies. Supply of ACF has not seen much impact.

Source: Digitimes Research, March 2011

The earthquake has little effect on glass substrate supplies from Corning and AGC

quake impact on glass supply

Source: Digitimes Research, March 2011

Realtime news
  • Google to incorporate NFC functionality into Android

    Mobile + telecom | 10h 54min ago

  • TPCA urges Taiwan government to upgrade PCB industry

    Bits + chips | 11h 6min ago

  • TSMC to offer more wafer starts to MediaTek in 3Q14

    Bits + chips | Jul 24, 19:30

  • TPK sees 2Q14 gross margin drop sequentially

    Before Going to Press | 11h 42min ago

  • O-film Tech to acquire Shenzhen Temobi Science & Tech

    Before Going to Press | 11h 44min ago

  • PCB maker Apex completes capital expansion

    Before Going to Press | 11h 57min ago

  • Handset solution vendors may roll out 10-core CPUs in 2015

    Before Going to Press | 12h 8min ago

  • TPK posts 1H14 net EPS of NT$1.37

    Before Going to Press | 12h 8min ago

  • China market: Mainstream pricing for smart wireless routers stands at CNY100-200

    Before Going to Press | 12h 9min ago

  • More IC vendors to engage in merger or acquisition deals

    Before Going to Press | 12h 11min ago

  • Intel to launch Core M for use in notebook/tablet 2-in-1 models in 4Q14

    Before Going to Press | 12h 11min ago

  • Notebook thermal module makers eye business opportunities from electric vehicles

    Before Going to Press | Jul 24, 19:12

  • Career expects sales to peak in 4Q14

    Before Going to Press | Jul 24, 19:11

  • Acer sees booming sales of Chromebooks, says CEO

    Before Going to Press | Jul 24, 19:03

  • China PV module makers expected to ask Taiwan solar cell makers to offer incentives

    Before Going to Press | Jul 24, 18:50

  • LG launches cloud-based monitors

    Before Going to Press | Jul 24, 18:49

  • AUO able to produce 42- to 75-inch WCG curved Ultra HD TV panels

    Before Going to Press | Jul 24, 18:47

  • Touch Taiwan 2014 to take place in late August

    Before Going to Press | Jul 24, 18:46

  • Global Ultra HD TV penetration to reach at least 6-8% in 2014

    Before Going to Press | Jul 24, 18:46

  • Digitimes Research: Japan promoting service robots

    Before Going to Press | Jul 24, 18:45

  • Small- to medium-size China smartphone component makers under pressure of being forced out in 2H14

    Before Going to Press | Jul 24, 18:44

Pause
 | 
View more
DIGITIMES Research Tracker Services
2014 global notebook demand forecast