Many chipmakers on the ground at the Mobile World Congress this week told EBN that they weren’t worried about mass producing silicon or powering their factories at full steam to meet demand. So, we asked them to point fingers, and tell us where they think potential issues could arise in the near-term.
It appears that what has put at least some people on guard is the industry’s ability to produce sufficient amounts of LCD-plus touch screen displays. More specifically, some mentioned glass shortages as the likely pain point -- we plan to ask some OEMs attending MWC the same question during the final days of the conference, too.
For Robert Thompson, director of smart mobile devices for Consumer Segment Marketing at Freescale Semiconductor Inc. , worldwide glass demand for tablets, mobile phones, TVs, PCs, MP3s, cameras, and many other devices, all of which require different dimensions, could tip the scales out of balance. He speculated it could even look like the shortage the industry experienced in the early 2000s.
Depending on which report you read, astronomical tablet growth is just on the horizon. Forrester, for instance, in a January report, said in the US market alone, tablets could go from reaching 10.3 million in 2010 to 82 million in 2015. According to a report from iSuppli Corp. , global shipments of tablets (both media tablets like the Apple iPad and PC-type tablets) could increase to as many as 242.3 million units in 2015, up by a factor of more than 12 from 2010.
Display production also has been on iSuppli’s mind. In a January report, Joseph Abelson wrote:
The technology industry’s rush to offer tablets that compete with Apple Inc.’s iPad will cause disruptions in the global display industry this year, generating both shortages and excess inventories, as display makers attempt to satisfy booming demand from their tablet customers...
Not since the dawn of television in the 1950s has another electronic device so effortlessly captured the hearts, minds, and discretionary spending of so many consumers.
John Carey, director of marketing for the TrueTouch product line at Cypress Semiconductor Corp. (Nasdaq: CY), said the key to ensuring consistent supply and addressing these rapid shifts rests in the strength of partner relationships. “We recently announced that we would be tripling our capacity,” Carey said, “We’re engaged with our third-party partners. We’re working with 25 glass and film vendors worldwide. We’re confident that the market will grow and be well supplied.”
This is very interesting. Do you have details about the possible glass shortage? I take it this glass is made out of something other than the abundant natural resources that are used in low-tech glass.
Oddly, I know a little about the glass used in displays. It is a unique glass that incorporates a lot of materials noy used in typical glass. Additionally, since LCDs are built a lot like semicondcutors, the glass has to withstand some rigorous manufacturing techniques. I believe Corning is the largest supplier of LCD glass--although there may be a supplier in Taiwan that's bigger.
I know less about touch-screen glass, but I'd imagine it's even more specialized. So glass shortages are a very real possibility in the electronics supply chain.
Barbara, I agree with you that the industry may face shortages of glass in near future. The reason behind this is obviously the unforeseen rise in demand of touch-based devices. I believe a lot more players should enter into displays manufacturing to cater to the demand. This may be lucrative area for them. What are some of the other measures that can be taken to meet the demand?
How many manufacturers do you think the market can handle? I'm assuming some companies are releasing tablets in order to get acquired by some big ones, or to merge between them.
Do you think there's any drawback to having too many tablets? (brands)... unless they use the same OS - which would help grow the app universe, but if not, it will come back to bite them.
Thanks for all these great questions. Since Marc Herman and I jointly collected the info for both text and multimedia slideshow, I want to make sure we're all tapped into the same conversation. The link for his piece is at here.
Like Barbara, I know little about the glass and LCD supplier segment, and am quickly coming up to speed. On the ground here, someone from a semiconductor company mentioned that there were three key suppliers in Taiwain, and another one that's a division of a large well-known Koren manufacturer. Another chip guy, told us they were in contact with 25 thin film and glass suppliers. So, I don't know yet who's who is this area, and which partners are aligned where and how. We'll see if we can find out. Anyone willing to rattle off some names?
One of the biggest issues, it seems, has to do with the incredible amount of fragmentation that's popping up in tablets, a segment growing expontentially. While Apple may dominate the global scale and many other top-tier manufacturers will be playing in that space, there's going to be lots of regional players going after regional customers, with language and other features adopted for specific countries. For sure, in 2011, we'll see lots of companies coming to the party, but it's hard to say what consumers will perefer.
Another problem is the size of the glass. While guys the we talked to here said that manufacturing faciities were able to change lines for the more standard size glass (which I believe for tablets has been 7 inch and 9.7 inch), we'll see lots more custom sizes, like Samsung's 10.1 inch. Like on the chip lines, changing production capabilities isn't always a simple thing
Generally for tablets as well, there's little on standards. Every tablet is a bit different, running on different OS systems, and with different features bundled into the hardware and software. Here's an article I stumbled on today in Australian Business Traveller that tries to make some sense of this mess.
I think a good strategy for smaller manufactures would be to capture vertical markets, instead of regional markets. If they target the supply chain, they can create a tablet that will be the best solution for companies in that area.
A few other ideas are EHR's and other medical markets, one for schools, etc.
I think that, first, competing against Apple, Motorola and RIM will be impossible. They need to build a good user base and then, probably, sell the company to one of the big ones.
Glass shortages or the film shortgaes or the manufacturing cpapcity constraints will have some affect on the LCD production. But I feel the Tier1 OEM's producing tablets may not hav a big issue. I think many OEM's will actually go in the way of apple considering the huge demand for LCD displays in future because of massive tablet market.
Its a good question if there will be enough displays for all tablets. With the increase in sales of tablets, the need of all the components in their part list would have become an issue, LCD displays must be the most ciritical ones. As long as they have multiple suppliers they are safe.
Natural disasters wreak havoc to the tune of $100 billion in annual damages, says a UN report. To cope, companies need improved risk management strategies.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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