AGC Fine Techno Korea, which is a glass substrate manufacturing plant owned by AGC and located in the South Korean city of Gumi, suffered a furnace explosion that also led to injuries of plant personnel on January 29. TrendForce’s latest investigation projects that this incident will affect no more than 1% of the total global supply of glass substrates for display panels. However, demand is rising across the panel market. At this sensitive moment, any event that affects the supply of panel components could exert significant influence on panel prices. In the second half of 2020, glass substrate supplier NEG (that is based in Japan) experienced issues that constrained the supply and thereby fueled the rise in panel prices. TrendForce does not rule out the possibility that this latest incident will also further bolster panel prices to some degree.
Explosion Accident Exacerbates Recent Tight Supply of Glass Substrates
The high demand for various panel applications, together with the issue encountered by NEG in the respective supply of glass substrates, has resulted in the relatively strained global supply of the product. NEG had initially anticipated resuming normal supply starting from the end of 1Q21, though the furnace explosion of AGC has created new variables to the overall supply of glass substrates. The affected furnace was planned to supply substrates for the new production line of G10.5 in China; thus TrendForce believes that AGC is bound to implement scheduling and allocation of production capacity after the furnace explosion, so as to respond to the supply void created by the incident, and the major affected time point will occur during 2Q21. The analysis of TrendForce indicates that a single production line for a single supplier will be affected if the scope of impact is strictly within the supply of G10.5 glass substrates, with implicated dimension as 65” and 75”. Should a scheduling of production capacity be required, the affected range will be enlarged to G8.5, and will include Taiwanese and partial Chinese panel suppliers, where the affected dimension will also expand to below 55”.
Panel Prices Are Expected Be Maintained at a High Level
Prices of TV panels have been climbing over the past several months and are still on the upswing. The excessively high cost of panel procurement is starting to become an issue for branded TV manufacturers. TrendForce previously forecasted that prices of TV panels would keep rising to the end of 1Q21 and then drop slightly in the second half of 2Q21 due to demand fluctuations. However, TrendForce has modified its projection on account of the furnace explosion at AGC Fine Techno Korea on January 29. Panel prices may continue to stay at a high point through 2Q21 and maintain this trend until late 3Q21 before further adjustments could take place.