Coronavirus may cause LCD TV and monitor prices to go up in the coming months

The outbreak of respiratory illness caused by a novel (new) coronavirus was first identified last month in Wuhan, Hubei Province, China. There are thousands of confirmed cases in China, including cases outside Wuhan City. Several cases have been identified in a growing number of other countries, including the United States. Chinese authorities have quarantined the city of Wuhan in an effort to stop the spread of the Coronavirus. Most of the businesses in Wuhan have temporarily suspended operations and moving out employees in an attempt to limit the spread of a coronavirus.

Wuhan city is home to five LCD manufacturing units which export LCD panels to several international markets. According to market research firm IHS Markit service, Coronavirus may affect pricing and supply of LCD TV and monitor in the coming months. In addition to LCD Fabs in Wuhan, the overall production of LCDs in China is expected to go down by at least 10-20%. In fact, the Chinese government has extended the leave of most organizations operating in the country till this weekend (Feb 9th). Even though the price increase may not go beyond $5 per panel, the end consumers will likely pay more for manufacturers.

“Display facilities in Wuhan currently are dealing with the very real impacts of the coronavirus outbreak,” said David Hsieh, senior director of displays, at IHS Markit technology research, in a statement. “These factories are facing shortages of both labor and key components as a result of mandates designed to limit the contagion’s spread. In the face of these challenges, top display suppliers in China have informed our experts that a near-term production decline is unavoidable.”

It will be interesting to see how major device OEMs respond to supply chain issues in China in the coming weeks.