South Korea’s display equipment industry has been engulfed by the aftereffect of COVID-19. As Chinese panel makers that have faced a direct blow from the spread of COVID-19 are postponing their schedules for bringing in equipment from South Korea one after the other, the display equipment industry is in danger of facing repeated blows. Although it is expected to face a flow to its operation as it will not be able to receive payments on time, there is not any clear alternative as Chinese customers are also facing an unprecedented situation.
According to Financial Supervisory Service’s Data Analysis, Retrieval, and Transfer System, South Korea’s major display equipment makers have recently made public announcements that they have extended durations of their contracts signed with Chinese companies. As the Chinese Government has closed down few cities and limited traffic in order to prevent the spread of COVID-19, Chinese panel makers have decided to delay the timing of bringing in new equipment.
SFA has extended its contract with Tianma that was expected to terminate on the 14th by 6 months. Device ENG has also extended its contract with Tianma worth $7.93 million (10 billion KRW) until the end of the next month due to Tianma’s request. SNU Precision stated that its contract with BOE would be extended until October. All three contracts involve equipment that will be used for fabs located in Wuhan.
“Equipment ordered by Chinese panel makers are currently stored in warehouses.” said a representative for the industry. “As it is impossible to operate plants normally due to the aftereffect of COVID-19, schedules for the supply of equipment have also become unclear.”