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Earthquake in Taiwan Impacts TFT-LCD Supply Chain

A magnitude 6.4 earthquake struck Kaohsiung in the south of Taiwan at 8:14 AM local time on March 3, causing some factories to shut down temporarily. The initial impacts on TFT-LCD fabs are as follows:

  • All of CMO’s LCD factories are in southern Taiwan (mostly in Tainan; Gen 8 is in Kaohsiung). The TFT LCD fabs have been shut down temporarily for damage evaluation. The last time CMO’s fabs were shut down by an earthquake, it took 2-3 days to re-start all the factories.
  • HannStar’s Gen 5 in Tainan was also shut down for damage evaluation. HannStar took 3-5 days to re-start the fab after the last earthquake.
  • Other TFT LCD makers seem not to have been affected.

The earthquake also affected glass substrate production:

  • AvanStrate has five tanks in southern Taiwan, and one of the Gen 5 tanks was damaged by the earthquake. However, AvanStrate was planning to shut down the tank for repair, so AvanStrate’s output of glass substrates will not be affected. AvanStrate is checking the status of its other tanks; CMO and HannStar are their main clients in Taiwan.
  • Corning has eight tanks in southern Taiwan, and all appear to be unaffected. But some glass substrates in the production process had to be discarded, so the output volume will be slightly impacted. Corning’s other tanks in Taiwan are OK.
  • AGC has a polishing line for glass substrates in southern Taiwan, which is unaffected. The company’s other tanks in Taiwan were not impacted by the earthquake.
  • NEG also has a polishing line for LCD glass substrates in central Taiwan, which is OK.

Other components are also affected:

  • Most of Toppan CFI’s color filter fabs are in southern Taiwan; it is believed that these fabs have been shut down temporarily for evaluation.
  • TSMC and UMC have foundries in southern Taiwan, which have been shut down for checks after the earthquake. These fabs all are 12″; most driver ICs are produced on 8″ lines, which have not been impacted by the earthquake.

We will monitor the status of these factories. While it is too early to gauge the impact of supply and pricing of TFT LCD panels, we can assume that any downward pressure on panel pricing has been eliminated. In fact, there are some indications that there will be another panel price increase in March due to the earthquake’s impact on the supply chain.

  • norman

    TSMC do have a fab (fab 6) in Tainan which is a 8″ fab and has LCD drivers production over there.

  • Andrew Abrams

    Is this just an easy way for panel producers to justify price increases or is it real? By my calculations if both Hannstar and CMO were shut down for the entire week, it would amount to a .4% decrease in m2 for the year, using 2009 numbers. As 2010 capacity in m2 is larger, the impact would be even smaller and likely the shutdown will be less than a week. Does this really justify any change in panel pricing or is it just an excuse to try to convince OEMs and set makers to pay up for inventory?

  • Shawn Lee

    CMO and HannStar did not shut down all of production process in last week, some process were re-starting within two days; we still watch the impact of panel output, it is early to gauge the impact of supply and demand now.

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