Analyst claims motherglass shortage pending

By Rachel Robinson
WaferNews Associate Editor

A worldwide shortage in motherglass could cause the growing popularity of flat panel displays, notebook computers, PDAs, and cell phone handset screens to become an even more expensive trend, according to business intelligence firm Provizio, Meridian, ID.

The cause for the shortage of motherglass – an essential component for LCD screens – is a combination of many factors including poor planning on the part of suppliers, a decrease in capital spending, a lack of accurate guidance in terms of demand, and a chemical spill that crippled a major motherglass supplier, Provizio CEO Tim Rhodes told WaferNews.

Rhodes predicted that by 3Q or 4Q02, the ASP of large monitors will jump by $50 to $60, and the ASP of flat panel displays will inflate by $100.

According to Rhodes, the increase in ASP could greatly slow the growth of the market. That prediction is in sharp contrast to a recent survey by Nikkei Market Access.

According to the survey, the production volume of LCD panels is expected to increase in 2002, to a production value of $14.2 billion, an increase of 28% over 2001.

But Rhodes doesn’t see that as a likely scenario. “With the increased demand for flat panel displays, there will be a critical shortage by the end of this year.”

Global demand for motherglass increased from 600,000 square meters/month in January 2000 to 810,000 square meters/month by the end of December 2000. It has grown 10% month-on-month since then, according to Provizio.

Some of the major motherglass manufacturers are coming online and are extending their lines, although not necessarily in response to what Provizio calls a shortage.

“We have a capacity expansion scheduled for 2002 in Kentucky, Japan, and Korea,” Joe Donze, manager of strategy and new business development for Corning Display Technologies told WaferNews.

But he was quick to point out that the expansion was not in response to any kind of shortage. In fact, Donze said that he has seen “no indication that there is glass shortage.” He commented that while he has seen a tightening in the supply of glass substrates, whether or not there is a shortage remains to be seen.

Rhodes acknowledged that new plants are coming online, but he said that they wouldn’t be ready to meet demand until 4Q at the earliest. “From our market check,” he said, “the problem could extend into 1Q03.”

NH Techo Glass, which supplies 10% of the worlds motherglass, had to shut down five of its LCD glass furnaces in Yokkaichi, Japan, recently, due to an accidental release of arsenious acid (WaferNews V9n03 Jan. 21, 2002). That shutdown has greatly affected motherglass supply, Provizio reported.

According to Provizio, sources from Reptron Electronics and Jaco Electronics, two distributors of FPDs, are already reporting double to triple increases in lead-times, and in some instances, the companies are reporting that they are forced to turn away orders.

In addition, Rhodes said that companies are hoarding inventory, which further exacerbates the situation.

“Companies want to downplay the shortage,” Rhodes commented. “But, it’s affecting everyone in the supply chain, and end users.”



Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.