That cuts both ways though. It implies that they were overproducing til now.
The monthly iphone production has been at 15M and the target for January is 20M. Let's say that Japan Display gets 1/3 of those numbers, then it should be making 15M or more displays per quarter. Nam Tai is only contracted to assemble up to a maximum of about 10.5M LCMs per quarter. Although component cuts may affect them, they don't necessarily.
Although it's possible the component oversupply is having a temporary effect on the stock price, it's also probable that people are locking in this year's tax rates as we get closer and closer to the end of the year and the fiscal cliff foolishness.