The latest report from WitsView, a division of TrendForce, indicates that this price uptrend may extend beyond the Chinese New Year holidays because an earthquake in southern Taiwan on February 6 disrupted the production of panel makers Innolux and HannStar.

The temporary reduction of Taiwanese panel makers’ capacities may lead to a tightening of supply and rising prices in the smartphone panel market. However, panel makers are fairly reserved about the prospect of a price increase. Ultimately, the demand from clients and LCD module assemblers in southern China will determine the price trend in the smartphone panel market during March.

WitsView’s survey of quotes for smartphone panels in March finds that the price increases have been concentrated in the segment of panel products for low-end devices. For instance, the prices of 5-inch IPS panels, including products with FWVGA and qHD resolutions, have seen the largest price increase within the application, up almost 10% from February.

Strong demand from China’s export markets and tight supply caused by the closure of a Gen-4.5 fab owned by Chunghwa Picture Tube (CPT) attributed to the price increase.

As for 5-inch HD panels, their prices in March have been at the same level as in February. Though Taiwan’s earthquake may decrease the smartphone panel supply from Innolux and HannStar in the short term, other panel makers such as CPT, BOE Technology, Infovision Optoelectronics (IVO) and even AU Optronics are ready to become the alternative suppliers.

Prices of panels for high-end smartphones have not risen as the industry will gain additional capacity in the second quarter of this year. Moreover, SDC has stepped up its efforts to promote AMOLED panels, so competing panel makers have been reluctant to raise their quotes for panels used in high-end devices. For example, prices of the 5.2-inch and 5.5-inch FHD panels have been relatively constant (if not slightly lower than in February).

WitsView also reports that HannsTouch, a Taiwanese supplier of touch sensors for AMOLED smartphone displays, was seriously affected by the February earthquake. The company will need one to one and a half months to repair and recalibrate the manufacturing equipment that was seriously damaged during the event.

Whether a short-term shortage of touch sensors will have an impact on AMOLED panel quotes remain to be seen. SDC, however, has responded to the emergency by asking other sensor suppliers to increase their production as to ensure the supply of AMOLED panels in general will remain at the same level.