China’s Sichuan extended the power curtailment order until Thursday (25th). Analysts expect that the output of local panel factories will further decrease, especially the global LCD TV panel production will be reduced by 20% in the month, and the oversupply of the panel industry is expected to slow down. .
The Sichuan Economic and Information Office and State Grid Sichuan Electric Power Company issued the “Urgent Notice on Expanding the Scope of Industrial Enterprises to Provide Electricity to the People” on Saturday, stating that due to the further intensification of the tension between electricity supply and demand, in order to ensure electricity for people’s livelihood, starting from August 15 Expand the implementation scope of industrial enterprises in the province (except Panzhihua and Liangshan) to let electricity to the people, and implement full production shutdown (except for security loads) for all industrial power users (including whitelisted key guarantee enterprises) in the orderly electricity consumption plan of Sichuan Power Grid. A “high temperature holiday” will be held from 0:00 on August 20 to 12:00 on August 25.
Previously, from 00:00 on August 15 to 12:00 midnight on August 20, Sichuan has issued a power curtailment order for industrial users.
According to Shanghai First Financial Report, Li Yaqin, general manager of Sigmaintell, said: “The impact of the extension of the power curtailment is still quite big now,” because the power curtailment in Sichuan was originally six days, and now it is extended for another five days, for a total of 11 days of power curtailment.
Sichuan has two 8.6-generation LCD panel production lines, one each for BOE and Huike, with a total monthly output of nearly 300,000 substrates.
Li Yaqin said that the two production lines were not fully loaded before August. Affected by the power cut in Sichuan in August, the utilization rate of these two production lines dropped significantly compared with July, resulting in the LCD TV panel supply in August falling to the lowest point this year, equivalent to 80% of the normal production level.
There has also been a power shortage in Chongqing recently. Sichuan and Chongqing are geographically close and have similar power supply sources, both relying on the Yangtze River hydropower. However, the rainfall in the Yangtze River Basin during the summer flood season was low, causing both Sichuan and Chongqing to face power shortages.
Huike also has a Gen 8.6 line in Chongqing. At present, the power cuts in Chongqing sub-regions are expected to have some impact on the utilization rate of panel factories, but the impact will not be as great as that in Sichuan. Li Yaqin said that if the impact of power cuts in Chongqing is taken into account, the extent of the impact of the global LCD TV panel production and supply may exceed 20%.
AVC Revo believes that the power cuts in Sichuan and Chongqing are just forcing panel factories to lower the utilization rate in disguised form, reducing the pressure of oversupply of panels to some extent. “It shows that the industrial chain has many layouts in the Sichuan-Chongqing region. Sudden power outages have a greater impact on the industrial chain, but it is also an opportunity for brands to adjust their inventory, which will help the industry to stabilize and return to rationality.”