Under the effect of Samsung's suspension of pulling goods, the supply chain came out that Hon Hai group issued instructions, requiring sharp in Japan's 10 generation of plants to significantly reduce the amount of glass, only a very small amount of glass every day, this close to "production halt" action is expected to last 1 to 2 months.
Samsung told suppliers in late June that it would suspend panel shipments in July, shaking up the panel industry as it is the world's largest buyer of TV panels. Among them, the 10th generation of SDP factories suffered a great deal of damage due to the concentration of customers. Market research AVC Revo (AVC Revo) said, because the main customers Samsung Electronics, LG Electronics in the second quarter under the situation of low demand continued to cut orders, but the SDP 10 generation factory is still maintained at about 70 ~ 80 thousand pieces of chip quantity, resulting in its panel inventory gradually increased, the main production size of 60 ", 70 "inventory pile up.
It is understood that sharp has been discussing internally last week to cut the SDP 10 production capacity by half from July, and it is rumored that Hon Hai's senior management has decided to directly cut the SDP 10 production capacity to the minimum and close to production. Besides TV panel market demand, this year TV panel prices continue to dip, mainstream dimension has been below the cash cost, more than 60 inches large size panel is continued to plunge, as SDP to 10 generation plant itself has been very hard, if not action production and cash flow continuously, operating and financial conditions will be more hard work.
The SDP 10 line has a maximum capacity of 85,000 units and currently produces 42-inch, 60-inch and 70-inch TV panels. About 2.1 million SDP generation 10 panels were shipped in the first quarter of this year, accounting for about 3.0 percent of the overall global TV panel shipment market, according to AVC Revo. In terms of customer structure, it mainly supplies to first-tier brands, among which the largest customer is Samsung, accounting for 19%, and the shipments from the top four customers account for more than 50%.
Samsung's suspension of shipments has set off a series of ripples. Dell also notified suppliers last week that it cut orders by 50% in the third quarter due to inventory problems. It is understood that LG Electronics and HP and other large manufacturers are also adjusting inventories and reducing panel purchases in the third quarter. According to Omdia, panel plants around the world continue to reduce the amount of chips they put in, and the capacity utilization rate of panel plants in June and July 2022 is expected to drop to 70% and 69% of their designed capacity, respectively, hitting a 10-year low. The previous record low was 77 per cent in February 2020, when the market was heavily oversupplied, before the outbreak led to a home economy that spurred a sales surge.
