According to South Korea’s gyeongshangbeidao fire station, at about 4:33 p.m. local time on January 29, an explosion occurred in the AGC glass substrate factory in the Guiwei Industrial Park, injuring nine workers and causing damage to the internal equipment of the factory. The local fire department believed that the explosion was caused by hydrogen or nitrogen remaining on the pipeline when workers were repairing the works in the factory.
According to the data, the turtle tail factory was established in 2004 by AGC, a subsidiary of Asahi Noko, a leading supplier of glass substrates in Japan. It mainly produces TFT-LCD glass substrates. The furnace in the factory was damaged by the explosion accident. At present, the furnace is being modified to produce generation 8.5 glass instead of generation 10.5 glass. It is expected that the explosion accident will affect the supply of generation 10.5 and 8.5 glass substrates.
Previously, another leading glass substrate factory also had production accidents. In December 2020, the glass factory of NEG, the world’s largest glass substrate manufacturer, was damaged due to an unexpected power failure. It is estimated that it will take four months to restore production capacity. The factory mainly supplies glass substrates of generation 8.5 or below. If the recovery situation is not as expected, it means that the supply gap of glass substrates will be expanded to 16-20 million square meters, equivalent to the four month capacity of an 8.5 generation panel factory.
The panel supply situation is tense, and the price rises by a large margin
Glass substrate is an important raw material of LCD panel, and its price trend affects the panel cost. Affected by the decline of glass substrate supply, panel prices continue to rise from May 2020. Taking the price of 32 inch panel as an example, the latest quotation in January was $68 / piece, which was more than 100% higher than the low of $33 / piece in May last year. Other sizes of panels also have a 50-100% increase. The supply and demand of large-size panels continue to be tight, and it is expected to maintain an increase of about US $5 from January to February.
The panel giant suddenly falls into the crisis of stop production! List of concept stocks exposed
In addition to the glass substrate, another raw material for the panel, wafer foundry capacity, is also in short supply, resulting in a shortage of display driver IC supply. According to supply chain sources, liandian and world advanced are planning to raise their quotations twice after the lunar new year, with a maximum increase of 15%. Under the background of the shortage of chips, the capacity of Lian Dian and other enterprises has been fully loaded, and the 8 – inch and 12 inch foundry prices have been raised. In an interview with the media, the world’s advanced chairman strategy said that at present, it seems that the tight state of 8-inch wafer OEM production capacity will continue at least to the third quarter of 2021.
Domestic manufacturers are expected to benefit from the launch of production lines in Japan and South Korea
In 2018-2019, the panel price will continue to be low, and the operating profits of major panel manufacturers will drop sharply. With the strong development of mainland enterprises, the competitive environment is becoming increasingly fierce. Under the pressure of profitability, many panel manufacturers in Japan and South Korea have announced to gradually withdraw from the market. LG display and Samsung SDC announced in 2019 that they will completely withdraw from the LCD production line by the end of 2020 and transform to OLED with higher profitability.
In the future, as more generation 10.5 lines are put into production, the capacity of domestic manufacturers will surpass that of South Korea and become the leader in the global panel industry. By 2021, the market share of domestic panel manufacturers in the global LCD TV panel market is expected to exceed 50%. After the withdrawal of Korean manufacturers, the proportion of large-scale production capacity of domestic panel factories is expected to increase from 44.8% in 2019 to 53.3% in 2020.
The list of panel concept stocks with pre increased performance is coming
According to the statistics of securities times · databao, there are 21 listed companies with panel production in the A-share market. On February 1, 14 stocks rose and 5 stocks fell. Rainbow shares, Shenzhen Tianma A and TCL technology were among the top gainers, up 6.69%, 5.74% and 5.12% respectively.
Benefiting from the rise in panel prices, some panel concept stocks have achieved substantial growth in 2020. Statistics show that the net profits of 10 listed companies in the panel sector rose year on year in 2020, and four of them are expected to double year on year, including BOE a, Ruifeng optoelectronics, * ST Huaying, Shenzhen textile A and Hisense video. Four other listed companies are expected to increase their net profits by more than 50%.
Leading BOE a announced on the evening of January 29 that the company is expected to achieve a net profit of 4.8-5.1 billion yuan in 2020, a year-on-year increase of 150% – 166%. According to the announcement, the increase in performance was mainly due to the relatively high prosperity of the semiconductor display industry compared with the same period last year, especially the sharp rise in the demand for it and TV products, and the continuous rise in product prices since mid-2020. The company’s flexible AMOLED product shipment increased significantly compared with that in 2019.
TCL technology, another leading technology on the panel, announced that it is expected to achieve net profit of RMB 4.26-4.46 billion in 2020, up 60% – 70% year on year. The company announced the acquisition of Samsung Suzhou production line with us $1.08 billion, and Samsung became the second largest shareholder of Huaxing. After the acquisition, TCL Huaxing will have three full-scale generation 8.5 lines in the large-scale field.
Since the beginning of the year, the panel concept stocks have risen to a large extent, and recently began to callback. Last week, the average decline of panel concept stocks was 6.45%, with six panel concept stocks having a correction rate of more than 10%. TCL technology and BOE fell by more than 13% in a week, and Longteng optoelectronics fell by 14.83%.