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Polarizer Producers Recover From Covid-19 Delays
Covid-19 impacted polarizer supply in China where 40% of the material is produced.
Polarizers are formed in the back-end process before being shipped to the panel maker. And the back-end process requires a larger amount of labor involved compared to the automated front-end process. Since most back-end processes are outsourced, the reduced manpower and limited logistics have had a direct impact on polarizer supply.
Table 1: Polarizer Shipment Production by Supplier
Covid-19 impacted polarizer supply in China where 40% of the material is produced.
Polarizers are formed in the back-end process before being shipped to the panel maker. And the back-end process requires a larger amount of labor involved compared to the automated front-end process. Since most back-end processes are outsourced, the reduced manpower and limited logistics have had a direct impact on polarizer supply.
Table 1: Polarizer Shipment Production by Supplier
Shipments in 2020 are expected to be up 2%, to 546 sq. m (m), with revenues of $9.5b down 3%.
Figure 1: Polarizer Shipments and Revenue
Demand for polarizers is expected to increase by 8% in 2021 and 4% in 2022 causing global supplies to remain tight through the first half of 2021 along with recent upsurge in demand for LCD panels supporting remote work and study. Although China-based polarizer plants are expanding their production capacity, total polarizer output from China may not increase meaningfully until the third quarter of 2021.
While polarizer supplies will remain tight through first-half 2021, suppliers may not be able to raise their quotes until the first or second quarter of the coming year as most polarizers are produced on contract basis. BenQ Materials' polarizer production lines are currently running at full capacity. The company saw its revenue increase 2.17% sequentially and 9.87% on year to a five-month high of NT$1.278 billion (US$43.55 million) in August. It also posted net profit of NT$109 million in first-half
Cheng Mei Material Technology (CMMT) expects its capacity utilization rate to reach 100% in November-December, with the production momentum likely to continue into first-quarter or even second-quarter 2021. Its factory utilization rate stood at 70% in second-quarter 2020. However, the company posted net loss of NT$213 million in the first half of 2020.
- Kunshan Chimei Materials Technology is currently producing one million square meters of 2.5-meter polarizers a month, with plans to ramp up its output to 1.5 million square meters by year-end 2020, the sources indicated.
- A new 2.6-meter polarizer production line of Shenzhen Sapo Photoelectric which is now under construction is not expected to come online until the third quarter of 2021, said the sources, noting that the plant can produce polarizers for up to 110-inch TV products licensing technology from Japan-based Nitto.
- LG Chem is withdrawing from the polarizer market and has reached a deal to sell 70% of its polarizer business and assets to China-based Shanshan Group for US$770 million.
While polarizer supplies will remain tight through first-half 2021, suppliers may not be able to raise their quotes until the first or second quarter of the coming year as most polarizers are produced on contract basis. BenQ Materials' polarizer production lines are currently running at full capacity. The company saw its revenue increase 2.17% sequentially and 9.87% on year to a five-month high of NT$1.278 billion (US$43.55 million) in August. It also posted net profit of NT$109 million in first-half
Cheng Mei Material Technology (CMMT) expects its capacity utilization rate to reach 100% in November-December, with the production momentum likely to continue into first-quarter or even second-quarter 2021. Its factory utilization rate stood at 70% in second-quarter 2020. However, the company posted net loss of NT$213 million in the first half of 2020.