Toshiba insists it no longer has TFT screen supply problems, but claims competitors will continue to experience difficulties in fulfilling orders.
Toshiba admitted, at the end of the June quarter, that they were struggling to supply 13 and 14 inch screens, with the situation only slightly improving in following months. Most affected by the shortages were Toshiba's Satellite 2590 and 4100 notebooks.
`There is a major shortage worldwide of TFT screens,' said Mark Whittard, Toshiba national marketing manager.
Whittard attributes the shortages to an increase in demand for TFT screens, inspired by a shift from CRT to LCD monitors in the IT industry and also in non-traditional markets such as Japanese poker machines.
And of the six major TFT manufacturers worldwide, two are fairly new, (Sharp and Samsung) and `never got up to full capacity'. Others were adversely affected by the Taiwanese earthquake.
Additionally, the shift from 12 to 13 and 14 inch screens was extremely rapid and meant supply could not keep up with demand.
IDC blames component shortages for the TFT crisis, with analyst Randy Giusto saying `the serious shortages of key LCD components such as motherglass, display driver ICs, condensers, colour filters, polarising filters and capacitors and resistors will hamper TFT LDC production over the next year'.
Giusto predicts shortages will continue through 2000, with motherglass demand outstripping supply through 2001.
However, Steven Sampson, managing director of distributor CHA, believes the shortages have been resolved and that the problem was never really endemic. `It is only Toshiba that we've had any problems with. We haven't experienced any problems with Acer and NEC. It's probably because Toshiba builds a lot of TFT screens and gave too many to their customers rather than keep them for themselves,' said Sampson, who said even Toshiba had overcome supply issues.
Yet according to Shane Taylor, general manager of reseller Applied Micro Systems, the effects are real, across numerous vendors and are already being felt. `We've had shortages of Toshiba, Compaq, IBM and Hewlett-Packard products and it has certainly impacted our bottom line. Even if you just look at the deterioration of customer satisfaction the situation is difficult,' said Taylor.
However, according to Whittard, Toshiba is in recovery mode, fuelled by its ownership or part ownership of five of the major TFT manufacturing plants around the world.
The `popular' Satellite 2590 and 4100 will also be `available freely' as of this week, said Whittard, as proof of Toshiba's recovery.
Taylor has heard the same spiel from Toshiba but warns that `right now things are as hard as they have ever been, especially for a reseller.
`Whenever there is even a short-term shortage you get into your buffer stock pretty quickly.'
Toshiba believes it suffered TFT shortages first because it is two to three times bigger than its competitors. `We sell so much product so quickly that we never really keep much stock. Companies like IBM, Dell and Compaq are the opposite and their stocks are only just being consumed so as we recover they will be feeling the pinch,' said Whittard.
For this reason Toshiba's competitors, who are at the mercy of third-party suppliers, will experience severe TFT screen shortages over the next couple of months, Whittard added.
Taylor backs this up, commenting that Compaq, Hewlett-Packard and IBM are `definitely experiencing troubles'.
Toshiba is planning to take advantage of this situation, with Whittard reporting that Compaq and Dell customers are already migrating to Toshiba because of shortages experienced by the two.
Taylor is sceptical of Toshiba's ability to do this, conceding that customers are asking about alternatives but that it is `difficult to migrate when there's nothing there to migrate to'.
Toshiba has in fact manufactured more stock than it usually would at this time of year in expectation of a Christmas retail bonanza. `Because Compaq is having problems not only with supply but with their retail strategy, we expect to sell between 700 and 1200 units more, purely because Compaq isn't in retail outlets such as Harvey Norman,' said Whittard.
Despite these prolonged shortages, Toshiba is not expecting any ramifications for its local shipment or revenue figures, with Whittard claiming they are up 12 and 20 per cent respectivelyfor the September quarter.
`We continue to exceed numbers and make budget because we shifted the mix. It's been more difficult than usual but we just sold more 12 inch screens than we normally would,' said Whittard.
Taylor agrees that Toshiba has handled the situation better than any of the other vendors, commenting that the vendor focused on its large corporate customers, rather than sales of just one or two units. `They [Toshiba] were smart and protected their big customers from the worst of the grief by making sure that the bulk of what was available went to corporate accounts.'