Excess inventory softens Japan quake impact on LCD panel vendors, market

"A decline in a major country's market share and a buildup in excess inventory normally are regarded as unfavorable developments for a technology market," said Sweta Dash, director of LCD research at IHS. "However, in the LCD market of 2011, Japan's limited presence in the global supply chain—combined with excess stockpiles in the channel—helped soften the blow of the manufacturing disruptions caused by the disaster."

Only five percent of large-sized LCD panel manufacturing capacity and just 18 percent of small- and medium-sized LCD manufacturing capacity was located in Japan in the third quarter. In comparison, Taiwan accounted for 40 percent of large-size capacity and 55 percent of small and medium. Because of this, disruptions to Japan's manufacturing and shipments had only a minor impact on the global LCD market.

The figure attached presents the percentage of global large-sized and small- and medium-sized LCD panel manufacturing by region.

TFT-LCD panel capacity by region, Q3 2011. Only five percent of large-sized LCD panel manufacturing capacity and just 18 percent of small- and medium-sized LCD manufacturing capacity was located in Japan in the third quarter.

Inventory saves the day
Panasonic, Hitachi and NEC were the only three panel suppliers whose fabs were impacted because of their proximity to the earthquake's epicenter, while Sharp's eighth- and 10th-generation fabs were not impacted at all.

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