Photronics CEO Thinks Trade War Will Spur More Chips, Displays to be Made in China

The new photomask factory that Photronics just opened in Hefei, China, is “designed to capitalize” on the industry’s migration to larger and larger TV screen sizes and the move to 8K, said CEO Peter Kirlin on a quarterly earnings call Wednesday. Two Gen 10.5 panel fabs optimized for 65- and 75-inch LCD TVs are “ramping” in China, “with three more fabs under construction,” said Kirlin. The U.S.-China trade war is the big unknown in keeping supply-chain costs down, he said. “Every day, a new piece of significant news seems to appear that more often than not demonstrates that the tension between the two governments remains high and the ultimate outcome of trade discussions is uncertain,” he said. “There have been many surprises so far and there are most certainly more to come. Short-term, these actions can go either way as far as our business is concerned.” The “direct impact to Photronics” of the Section 301 tariffs imposed so far “has been minimal and not material to our results,” he said. “In the long run, I believe this tension will motivate more, not less semiconductor content to be manufactured in China, and without a doubt, more chips and displays equates to more demand for photomasks,” especially for China-based manufacturers, he said.