Shanghai is an important city of China’s semiconductor industry. Under the influence of the epidemic, what is the situation of display panels, laptops and chips in Shanghai and the Yangtze River Delta?
At present, the supply of small-size panels and polarizers has decreased, and local and surrounding color TV factories, notebook computer OEM factories and circuit board factories have also stopped production. At the same time, the epidemic also slows down the whole line of terminal demand, and the reduction of supply and demand will offset each other.
In order to comprehensively promote epidemic prevention and control and economic and social development, Shanghai is making concerted efforts with cities in the Yangtze River Delta. Wu Qing, member of the Standing Committee of the CPC Shanghai Municipal Committee and executive vice mayor of Shanghai, said at the press conference on epidemic prevention and control held on April 19 that the three provinces and one city are stepping up the trial establishment of the “white list pool” system of key industrial chain supply chains and their supporting supply enterprises in different places in the Yangtze River Delta to jointly guarantee and promote the coordinated resumption of work and production of the whole industrial chain in the Yangtze River Delta.
Dong min, Deputy Secretary General of China Electronics and video industry association, believed in an interview with China first finance and economics that semiconductor display manufacturers generally prepare materials for inventory for more than one month. At present, the epidemic in and around Shanghai is expected to have little impact on the supply of medium and large-size display panels.
“The epidemic prevention and control in Shanghai, including the Yangtze River Delta, reduced the national transportation capacity to about 70% in April, resulting in a decline in supply chain efficiency and an increase in logistics costs.” Li Yaqin, general manager of Qunzhi consulting, analyzed to the first financial reporter that most of the local panel and semiconductor enterprises carry out closed-loop management, and the production is basically not affected. The blocked logistics will delay the delivery date, but it will not lead to a large-scale shortage.
short term delivery delay of small panel
According to the Research Report of avcrepo, the panel plants of shentianma ( Tianma Microelectronics Co.Ltd(000050) . SZ) and Everdisplay Optronics (Shanghai) Co.Ltd(688538) ( Everdisplay Optronics (Shanghai) Co.Ltd(688538) . SH) in Shanghai are all production lines of generation 6 and below. The supply of small-size panels is affected, and the closed-loop production is also facing challenges.
Among them, Tianma has three production lines in Shanghai, including a 4.5 generation LCD panel line, a 5 generation LCD panel line and a 5.5 generation OLED panel line. The panels of these three lines are mainly used in the fields of mobile phone, vehicle, medical treatment and industrial control. At present, these three lines are in the state of closed-loop production.
In addition, Everdisplay Optronics (Shanghai) Co.Ltd(688538) has a 4.5-generation OLED panel line and a 6-generation OLED panel line in Shanghai. The products are mainly used in wearable, mobile phone, tablet computer, vehicle, medical treatment, industrial control and other fields. According to the Research Report of Orville Ruiwo, 50% of the production capacity of the two lines is affected due to the uneven arrival of employees and lack of materials.
Relevant people from shentianma told the first financial reporter that in the short term, the production and operation of Shanghai industrial base will face great pressure. Tianma actively takes various measures to ensure the normal development of business, product development, operation management and quality management through closed management in the park and remote office of employees on the premise of doing a good job in epidemic prevention and control.
“Due to the supply of individual raw materials, local logistics restrictions and relevant production adjustments for safety reasons, it is expected that there will be a certain time delay in product delivery in the short term.” The above-mentioned people from shentianma said that Tianma actively makes flexible operation adjustment arrangements by making use of the existing production line layout, constantly tap the potential of production lines in other areas not affected by the epidemic, improve production opportunities and make up for them. Tianma will continue to maintain positive contact with suppliers and customers and intensively follow up the progress of orders. The company team will try its best to overcome the difficulties, minimize the impact of the epidemic on production and operation, and make up quickly after the epidemic is alleviated.
Insiders told first finance that Everdisplay Optronics (Shanghai) Co.Ltd(688538) ‘s factory is currently in the control area, and some production and manufacturing personnel live in the sealed control area. The two production lines in Shanghai have three main process sections. The first two array and OLED process sections are fully automatic production lines, which are basically not affected by the shutdown. The last process section is the module section, which has been suspended for a period of time due to the impact of the epidemic because of the relatively dense personnel. In addition, due to the need to cooperate with the epidemic prevention policy in the city, the availability of some production and manufacturing materials and the shipment of customers’ products are also affected to a certain extent. At present, Everdisplay Optronics (Shanghai) Co.Ltd(688538) has applied to the district for resumption of work and production, and is expected to resume production at the end of this month.
large size display material supply decrease
In terms of medium and large-size display, the Research Report of Orville said that the production capacity of Hengmei photoelectric’s two polarizer production lines in Kunshan, Suzhou mainly supplied TV panels, and Kunshan’s static management interrupted its logistics and transportation. CLP, Huike, sharp, Huaxing and BOE are all Hengmei photoelectric customers. However, at present, the panel factory still has inventory to digest, but the follow-up of static management may affect the material supply.
A number of PCB (circuit board) manufacturers in Kunshan also stopped production, including Xinxing, Nandian, jingshuo, Nanzi, Jinxiang, Bozhi, taioptoelectronics, etc. they extended the silence period to April 19 according to local regulations.
Amlogic (Shanghai) Co.Ltd(688099) ( Amlogic (Shanghai) Co.Ltd(688099) . SH), headquartered in Shanghai, is China’s leading supplier of SOC chips for multimedia intelligent terminals. Cao Yi, CEO of weishixin semiconductor (Hefei) Co., Ltd., which focuses on color TV chips, analyzed to the first financial reporter that Jingchen makes chip design, which is generally handed over to TSMC, and the epidemic should not be affected. The chip designed by WCW was handed over to China Unicom’s Taiwan foundry, which was sealed off in Chinese mainland. The supply chain was temporarily not affected by the current epidemic. It is expected that its VST3100 chip products will be delivered on time.
Cao Yi revealed that weishixin also has employees in Shanghai. This time, it has launched the home office mode of employees. Employees can safely access the company’s network through VPN and transport the instruments and equipment they need to use daily to their homes. As some equipment is large and expensive, non Shanghai partners are also arranged to help carry out relevant tests.
The manufacturing industry of complete consumer electronics in Shanghai and its surrounding areas has also been affected in this round of epidemic. Sony’s color TV production plant in Pudong stopped production, and husuo’s factories in Shanghai and Kunshan City, Jiangsu Province (i.e. Shanghai Changshuo and Kunshan Shishuo), which OEM Apple iPhone and MacBook, also stopped working for many days.
The good news is that on April 15, Dagong (Shanghai) computer, a subsidiary of Guangda computer, a pen power generation factory, applied for resumption of production under the premise of strict epidemic prevention. At present, some production capacity has been resumed. Guo mingpeng, an analyst at Tianfeng international securities, said on the 18th that Guangda Shanghai plant will give priority to restoring the Apple Mac computer production line, followed by the Tesla auto parts production line. Guangda Shanghai F3 factory mainly produces new MAC computers. Guangda has about 40000 employees and 8 plants in Shanghai, of which F1 and F3 plants are gradually returning to work. On the 18th, 5% of the employees have returned to work, and it is expected to increase to 15% on the 22nd.
consumer electronics terminal demand decline
The production capacity of the production side has been affected, and the terminal demand has slowed down due to the impact of the epidemic.
The person in charge of a color TV enterprise told the first financial reporter that this round of epidemic in Shanghai has prevented offline sales in Shanghai and its surrounding areas; The logistics in Shanghai and its surrounding areas stopped, resulting in the online sales in this region unable to deliver goods and also in a stagnant state.
Because of the repeated epidemic, everyone’s consumption mentality has become cautious, and the market has been affected.
According to the offline monitoring data of China’s TV in the first quarter of 2022, the offline TV sales in Shanghai fell 49% year-on-year in the first quarter of this year. Orville Ruiwo predicts that the epidemic will also bring pressure to the “June 18” promotion this year.
On the other hand, Qunzhi consulting, a research organization, lowered its consumer electronics demand forecast for 2022. It is estimated that China’s TV shipments will fall below 40 million units to 39.9 million units this year; This year, China’s display shipments will decline by 4.1% year-on-year to 35.5 million units, 1.5 million units less than originally expected; Global mobile phone shipments this year were 1.3 billion, 50 million less than expected at the beginning of the year.
Li Yaqin believes that 2022 was in the post epidemic period, the demand for consumer electronics weakened, and the second quarter was in the destocking period, resulting in the decline of logistics efficiency, which offset the decline of both supply and demand. However, the specific situation varies with different consumer electronic products.
New energy vehicles are in a period of rapid growth. Shanghai is an important base of the automobile industry chain. Shanghai fengkong is expected to reduce the national automobile output by 15% ~ 20% year-on-year in April. The decline led by the supply impact is expected to reduce China’s automobile sales by 11% year-on-year in the second quarter. Qunzhi consulting lowered the expectation of Shanxi Guoxin Energy Corporation Limited(600617) automobile demand by 4 percentage points in the middle of this year, which was the same as last year.
Many notebook computer production plants are located in Shanghai and Kunshan, Jiangsu Province. It is expected that the notebook OEM will reduce the shipment of 1.4 million to 1.5 million units in the second quarter due to the impact of sealing control, but there will be no shortage due to the decline in demand.
Affected by the epidemic in the Yangtze River Delta, the production of mobile phone panels is expected to lose the shipment of 5 million tablets in the second quarter, but there will be no shortage because of the conflict between Russia and Ukraine and the impact of the epidemic on demand.
The resumption of work and production in Shanghai and the Yangtze River Delta is gradually advancing. Li Yaqin believes that if the logistics problem is not solved, it is difficult to improve efficiency. After all, it will make the freight not go out or the shipment slow down. Therefore, ensuring transport capacity is very important. Logistics is the blood vessel of manufacturing industry. Because of the uncertainty of future demand and the rising pressure of raw materials and logistics costs, she suggested that relevant enterprises operate cautiously and steadily and should not expand blindly.
