Masahiro Okitsu, President of Sharp, a subsidiary of Foxconn, announced in a joint interview with Japanese media that the Sakai Display Product (SDP) plant, which produces large-size LCD panels for TVs, will cease production earlier than planned. Initially scheduled for the end of September, the shutdown is now expected to occur in late August.

According to a report by Asahi Shimbun on July 16, Sharp President Masahiro Okitsu announced in a joint media interview that the SDP, which produces LCD panels for TVs, is expected to completely cease production after the Obon festival (late August). This interview marks Okitsu’s first media appearance since taking office as Sharp’s president on June 27.

Okitsu mentioned that around July 20, SDP will start put glass substrates into production, with the final batch of LCD panels produced a month later.

Sharp’s SDP land and plant will be transformed into an AI data center, and a collaboration with Softbank and KDDI has been announced. However, Masahiro Okitsu did not elaborate on this cooperation framework during the media interview on July 16th.

Regarding Foxconn Chairman Young Liu’s appointment as Chairman of Sharp, Okitsu stated that this makes the division of duties clearer. Foxconn will oversee and support Sharp, while the existing brand business operations will be managed by Sharp.

Okitsu also pointed out the goal of increasing the operating profit margin of the “brand business,” which includes products like white goods, to 7% by the 2027 fiscal year (compared to less than 5% in the 2023 fiscal year). He emphasized that achieving a return to profitability in the 2024 fiscal year is imperative.

Reportedly, with Foxconn’s technical assistance, Sharp also plans to enter the AI and electric vehicle (EV) businesses, with plans to launch in the 2026-2027 fiscal years.

On May 14, Sharp announced its financial report, indicating that due to impairment losses in its panel business, the net loss for the 2023 fiscal year (April 2023 – March 2024) reached JPY 149.9 billion, marking the second consecutive year with a net loss exceeding 100 billion yen. However, Sharp forecasts that for the 2024 fiscal year (April 2024 – March 2025), its consolidated operating profit will be JPY 10 billion, with a consolidated net profit estimated at JPY 5 billion.

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(Photo credit: Sharp)

Novatek, a major driver IC manufacturer in Taiwan, entered the iPhone 16 supply chain early this year and secured certification ahead of its competitor LX Semi. However, according to a report from Commercial Times citing sources, its Korean competitor, LX Semi, recently also obtained certification and, with strong support from foundries, is challenging Novatek’s exclusive supply position.

The same report continues to cite sources indicating that LX Semi remains the exclusive supplier for iPhone 16 Pro/Pro Max’s LG Display (LGD) OLED screens in the second half of the year, with significant acceleration in chip production starting in September. It is estimated that the order allocation between Novatek and LX Semi will be 55:45.

Industry sources cited by Commercial Times reveal that LX Semi has a closer partnership with leading foundries, compared to Novatek’s previous strategy of relying on established foundries. Reportedly, another sources confirms as well that LX Semi has recently been certified and, with support from foundries, will begin significant wafer production by the end of the third quarter.

Other industry sources cited by the report further pointed out that Apple’s OLED panels are supplied by Korean manufacturer LGD, while LX Semi was originally LG Group’s subsidiary. Therefore, after LX Semi obtained certification, they increased orders from LGD, thereby reducing the originally planned procurement of OLED driver ICs from Novatek. However, for Novatek, they still heavily rely on Apple orders. If shipments go smoothly, they are expected to further secure opportunities in other product lines, such as iPad OLED DDIs and Apple Watch.

Yet, concerns are also noted, as the report brought up that the momentum in TV applications accompanying sports events is expected to slow down. Additionally, subdued sales during China’s 618 shopping festival and a conservative attitude among brand manufacturers in the second half of the year may affect demand for components like DDICs.

Therefore, Novatek keeps investing in establishing OLED production lines in order to seek new breakthroughs, such as IT TCON (timing controller) products. These products are manufactured using a 12-nanometer advanced process to create efficient computing units, integrating UHD 240Hz LCD and OLED panel display compensation functions, targeting high-end laptops.

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(Photo credit: Novatek)

Following its success in the LCD panel market, China’s BOE Technology Group plans to lead in the OLED panel sector as well. According to a report from Japanese media outlet Nikkei News on May 27th, BOE, China’s largest panel manufacturer, plans to boost its OLED panel production capacity by more than a half compared to the current level within the next three years.

As per the same report from Nikkei News, BOE has established a series of LCD plants with support from the Chinese government. In the OLED panel sector, BOE is also said to be eyeing on becoming the market leader by expanding production and catching up with South Korean companies like Samsung Electronics.

Reportedly, BOE’s new OLED panel plant “B16” in Chengdu, Sichuan Province, began construction in late March. The goal is to complete the plant building by 2024, install manufacturing equipment by September 2025, and start mass production in 2026, producing 8.6-generation OLED panels. BOE’s competitor, Samsung Electronics, is also said to be looking for mass production of 8.6-generation OLED panels in 2026 by upgrading its existing plants.

The same report further indicates that BOE is actively hiring talented professionals from Japan and South Korea and leveraging global suppliers. Thus, BOE’s OLED panel technology has reportedly gained recognition, successfully entering Apple’s iPhone OLED panel supply chain, serving as a catalyst for its growth.

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• Shipments of OLED Monitors Hit 200,000 Units in 1Q24, Annual Forecast to Reach 1.34 Million, Says TrendForce[News] NVIDIA’s H100 Chip Heat Declines, CoWoS Capacity Eases

(Photo credit: BOE)

TrendForce has released the latest panel quotations for early May. TV panel prices showed signs of stabilization as increased supply capacity mitigates the upward trend. Meanwhile, monitor (MNT) panel prices maintain their upward trajectory, driven by the market’s robust demand. However, challenges persist in forming a consensus for price increases in the notebook (NB) panel sector, resulting in relatively lower price level.

More details are as follows:

• TV

After May, the momentum of stocking up on television panels starts to weaken, particularly in the medium-sized and small-sized television panels due to decreased demand. As a result, the momentum for overall panel price increases tend to gradually slow down.

Whether panel manufacturers will once again initiate their strategy of producing on-demand over the next two months, thereby correcting the high-end utilization rate of over 80% to support the trend in panel prices, will be a key point for observation in the near term.

Looking at the price increases of television panels in May, it is expected that the prices for 32-inch, 43-inch, and 50-inch will stabilize, while 55-inch panels will increase by 1 USD and 65-inch and 75-inch will increase by 3 USD.

• MNT

With regard to MNT panels, demand from brands remains robust. On the other hand, panel manufacturers’ urgent desire to boost panel prices as much as possible during this wave of price increases, driven by aim to achieve a turnaround in the deficit situation for MNT panels, also helps on the relatively proactive stance towards the panel price trend in May.

Currently, it is expected that in May, the prices of MNT panels will increase. Open Cell panels are expected to rise by 0.5 to 0.7 USD. Among panel modules, the 21.5-inch is expected to increase by 0.5 USD, the 23.8-inch by 0.6 USD, and the 27-inch panel by 0.5 USD.

• NB

Looking at NB panels, although demand for panels has started to pick up noticeably compared to the first quarter, rebounding from the seasonal downturn, the increase is still lower than initially expected. This reflects the high uncertainty among brand customers regarding future end-demand, making it difficult for clear signals of panel price increases to emerge.

Panel manufacturers also find it challenging to establish a strong and consistent consensus on panel pricing strategy due to the lower-than-expected growth in demand.

It is currently expected that in May, the prices of NB panels will see only a slight increase. For HD TN models, where supply is limited and demand is relatively good, coupled with lower prices, there is a chance of a marginal increase of 0.1 USD.

For FHD IPS models, where there are more suppliers and fiercer competition, some panel manufacturers hope to follow the price increase of HD TN models and raise prices by 0.1 USD as well. However, this still depends on the attitude of brand customers.

Read more

• [Insights] April Panel Prices Update, TV Upward Trend Stabilized, Monitor Panel Increases Expanding
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Taiwan experienced consecutive earthquakes measuring 7.2 and 6.5 on the Richter scale this morning. According to the Hsinchu Science Park Bureau, foundries such as TSMC and UMC, along with panel manufacturer Innolux in Zhunan, have partially shut down operations as a preventative measure. Additionally, IC testing house King Yuan Electronics and Polyimide Film manufacturer Taimide Tech have evacuated all staff from their Gongluo plant.

An earthquake with a magnitude of 7.2 on the Richter scale occurred at 7:58 AM Taiwan time on the 3rd, with the epicenter located 25 kilometers south-southeast of Hualien.

The regions densely populated with semiconductor and panel factories, Taichung City and Hsinchu County, experienced a maximum seismic intensity of level 5, while Hsinchu City and Tainan City reached a maximum seismic intensity of level 4.

The Hsinchu Science Park Bureau reported that TSMC and UMC in Zhunan have partially shut down for precaution, Innolux Corporation in Zhunan also partially ceased operations, while all employees at King Yuan Electronics and Taimide Tech have been evacuated. Display maker AUO, as well as semiconductor supply chain companies Macronix, PSMC and UMC in Hsinchu Science Park are operating normally.

The bureau also stated that electricity supply in various parks within Hsinchu Science Park is normal. However, there are anomalies in the water supply at the  Biomedical Science Park and Tongluo Science Park, which are currently under investigation; all other parks and construction sites within Hsinchu Science Park are operating as usual.

In another statement by the Southern Taiwan Science Park Bureau, Innolux’s Plant B, TSMC’s Fab 18, and Hannstar in the Southern Taiwan Science Park recorded a seismic intensity of level 4, while Innolux’s Plant F in Kaohsiung measured a seismic intensity of level 3. Companies within the area reported no impact.

For further updates on the aftermath and damage assessment, please follow TrendForce News closely.

(Photo credit: USGS)