Japan LCD industry survives quake, but sales may fall

14 March 2011 20:36  [Source: ICIS news]

HOUSTON (ICIS)--Japan's flat-panel-display industry will likely suffer few disruptions to its supply chain as a result of an earthquake, although sales could fall, a consulting firm said on Monday.

The earthquake hit Japan on Friday, with a magnitude of 9.0. The death toll is expected to exceed 10,000.

The quake and subsequent tsunami have shut down 22% of Japan's refining capacity and disrupted operations at several chemical plants.

Flat-panel displays use such chemicals as organometallics and methyl methacrylate (MMA).

Much of Japan's flat-panel-display production was located away from the areas damaged by the earthquake, said David Hsieh, vice president of the greater China market for DisplaySearch.

DisplaySearch is made up of analysts and consultants that follow the display industry.

Hsieh made his comments in a blog on DisplaySearch.

The plants that are in the earthquake areas either use older technology, focus on small- to mid-sized panels or escaped damage altogether, Hsieh said.

In other cases, producers had built up stocks of key components, Hsieh said.

"There does not appear to be any major impact or damage to the overall supply chain," Hsieh said.

In Japan, the effects on the industry could be more psychological, Hsieh said.

The disaster could shake consumer and business confidence, Hsieh said. Higher oil prices could also affect consumers and companies.

Already, DisplaySearch was expecting television sales to fall steeply, based on the industry's performance in both the fourth quarter and 2010 as a whole, Hsieh said.

Outside of Japan, inventories were building, indicating that slack already exists in the industry, Hsieh said.

Transportation and power problems within Japan could hurt producers outside of the country, Hsieh said.

These producers rely on Japan for liquid-crystal-display (LCD) components and raw materials, he said.

In fact, companies in Taiwan, South Korea and China have expressed concerns about how the supply chain will perform in the next few months, Hsieh said.

Among feedstock chemicals used in flat-panel displays, Asian supplies of MMA are expected to remain tight because of unplanned shutdowns and turnarounds.

By: Al Greenwood
+1 713 525 2645

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index