(Yicai Global) April 21 -- The Covid-19 outbreak and subsequent restrictions in and around Shanghai are affecting display panel production, but supply chain disruption is not as severe as possibly expected because the outbreak is also damping down demand for consumer electronics.

Most panel makers have introduced so-called closed-loop working practices so production is basically unaffected. But snarled logistics make on-time product deliveries a problem, according to Li Yaqin, general manager at Sigmaintell Consulting.

“The pandemic prevention and control measures in Shanghai, including the Yangtze River Delta region, pared national logistics capacity in April to about 70 percent of the norm, resulting in lower efficiency and higher logistics costs,” Li told Yicai Global.

A source at Tianma Microelectronics said the Shanghai-based firm expected short-term delays in product shipments from its factories in the city due to the disruption to logistics and changes to work schedules caused by Covid-19 restrictions.

Tianma's three small-size display panel production lines in Shanghai are each in work bubbles, including two liquid-crystal display, or LCD, lines and a gen-5.5 organic light-emitting diode, or OLED, panel line. They are mainly used in mobile phones and cars and well as for medical and industrial control panels.

But production of large and mid-sized display panels has been less affected by the outbreak. Dong Min, deputy secretary-general of the China Video Industry Network, told Yicai Global that the outbreak in Shanghai and surrounding areas has had much impact on those panels so far, as manufacturers generally have enough component stocks to last a month.

Consumer electronics makers in Shanghai and its environs have also been affected by the latest wave of the coronavirus, with the decline in demand for displays expected to partly equalize the drop in supply.

Yicai Global learned that Sony's color television plant in Pudong district is still closed, and Pegatron's factories in Shanghai and Kunshan in neighboring Jiangsu province, which turns out Apple iPhones and MacBooks, have been shut for days.

The head of one color TV maker told Yicai Global that this Covid wave has caused a temporary closure of its brick-and-mortar stores, while issues with logistics have impacted online sales as well. More importantly, recurring outbreaks are denting consumer confidence and spending on electronic products.

In this regard, Sigmaintell’s Li pointed out that the pandemic has led to a decline in both the demand and supply of display panels, offsetting each other, though the decline in demand across various consumer electronics is not exactly the same.

Editor: Tang Shihua