Sharp cuts LCD production
4/8/2011 1:54 PM EDT
SAN JOSE, Calif. - Japan's Sharp Corp. is reducing its LCD production output ''due to the delay of component procurement following the March 11 earthquake,'' according to Dow Jones.
In response, LCD glass maker Corning Inc. said he company plans to maintain production levels at its Shizuoka and Sakai City LCD glass facilities during Sharp's temporary production curtailment of LCD panels.
“Sharp has informed us they are significantly curtailing operations at their Gen 8 and Gen 10 panel making facilities for a period of time. We intend to continue to maintain our own production levels at both of our Japan manufacturing facilities to replenish LCD glass inventories and provide glass to other geographic regions,” said James Flaws, vice chairman and chief financial officer of Corning, in a statement.
“The decision by Sharp has no impact on our Corning Gorilla Glass operations in Japan. Demand for Gorilla Glass continues to be very strong,” he said.
''Looking to 2Q11, our checks had pointed to glass tracking flat to +5 percent with panels tracking flat,'' said C.J. Muse, an analyst with Barclays Capital, in a report.
''So, clearly, some inventory was building, with more serious builds at CMI and Sharp. Overnight, Sharp corroborated this by announcing reduced utilization at its Gen 8 and Gen 10 tanks,'' he said. The good news is that panel makers are proactively looking to manage inventories.''
Although the LCD TV supply chain is going through an inventory adjustment, major LCD TV brands are planning to increase production in Q2’11 in order to catch up with expected growth in sell-through, according to DisplaySearch.
Monthly production by the 17 top LCD TV brands grew 15 percent from February to March, and is forecasting to grow 6 percent in April, according to the firm.
In Q1’11, the leading 17 LCD TV brands planned to produce 41.1 million LCD TVs, and are targeting 44.8 million units for Q2’10, up 9 percent, according to the firm.
LG Electronics, as well as Chinese set makers like TCL, Hisense, Skyworth and Changhong, are aiming for double-digit growth. Japanese brands, including Sharp, Panasonic, Sony, and Toshiba, ''are planning for lower growth or reduced production due to the earthquake in Japan and the uncertain economic situation,'' according to the firm.
''Samsung’s LCD TV production has been steady at 3 million per month for the first six months, with the exception of 3.3 million units in March. Sony plans to maintain its production levels at 1.9 million units from March to June, while LG Electronics plans to raise production from 2.3 million units in February to 2.6 million units in June,'' according to the firm.
In general, China TV makers’ production will peak in April. However, in preparation for the coming May Labor Day shopping season, Chinese brands, especially Changhong, Hisense, Skyworth and TCL, are raising their production volumes in March, April and May. LCD TV panel makers are increasing shipments to the China market.
“Supply chain inventory is at a healthy level due to aggressive price cuts since Q4’10, and new LCD TV models are in the pipeline and on the way to retail shelves,” noted Deborah Yang, an analyst at DisplaySearch, in a report. “Our research indicates that LCD TV brands tend to err on the cautious side, prioritizing inventory control and adjusting production plans as needed, in case sell-through in main markets is not as good as expected.”