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Touch screen availability- the tablet industry’s Achiles heel?

by on August 2nd, 2010

With the market for tablet devices still rosy with the blush of youth, and sales apparently robust, it is hard to see what could go wrong, aside from intense competition and a flooded market, of course.

But already it seems that certain elements of the tablet device supply chain could be constrained. Manufacturers of touch screens are in a position of strength and could withhold screens from rivals on the grounds that they need themselves. Of the handset players, LG and Samsung are best placed in so called AMOLED screen technology. AMOLED technology happens to be behind the clever touch screens in smartphones and tablets like the iPad, but it seems they will not be able to keep up with demand.

In fact, LG’s chief executive has already admitted that it may not be able to meet demand for AMOLED touch screens, with the CEO of LG Display noting in an interview with Reuters that supply may be tight until next year. Worse, lower demand for TVs could mean that production cuts are made in the touch screen market just as demand for screens for tablets increases.

It also seems that companies are already building touch screen supply into their procurement decisions. HTC seems to be going down the route of using LCD technology in order to avoid supply chain delays, though switching technologies for such an important element of the device inevitably creates delays itself.

This could be wise for two reasons, though. It may mean that they do not have to face delays that other smartphone and tablet manufacturers have to face. It could also mean that they benefit from advances in LCD technology as and when they happen. HTC will use screens made by Sony for HTC Desire.

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