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In September, area prices for all screen sizes up to 65” fell in a range from $92 to $106 per square meter, with the 65” area price tied with 32” for the lowest in the industry at $92 per square meter. The largest screen size in our survey, 75” panels, continues to have a premium but that premium has eroded steadily. In June 2022, a 75” panel was priced at $144 per square meter, a $41 or 40% premium over the 32” area price. By September, the 75” premium over 32” had dropped to $27 and 29%. While prices for 65” and smaller panels increased in October, 75” prices stayed flat, and we expect that pattern to continue through Q4 and Q1.
Throughout the many cycles in the industry, we have seen that the most commoditized screen size is 32”, because this screen size can be efficiently produced on every Gen size fab from Gen 6 through Gen 10.5. Thus, when prices go down, 32” prices go down fastest, but when prices increase, the 32” price increase fastest as well. This was true in October as 32” prices increased by $2 or 7% for the month; the area price increased from $92 per square meter in September to $99 in October.
The next chart shows our estimates of cash costs vs. panel prices for large TV panels. While 55” panels have been below cash costs for most of the year, 65” prices reached cash costs in Q2 and for the first time 75” panel prices fell below cash costs in Q3. We expect that 55” and 65” panel prices will increase in Q4 and Q1 2023 but will remain slightly below cash costs.
LCD TV panel prices have stopped falling after sliding below suppliers" cash-cost levels, according to industry sources. Additionally, aggressive production cuts by panel makers also have helped bring a stop to falling prices.
According to Pan Tai-chi, general manager of the TV Business Center of Innolux, TV panel inventories at most TV vendors and channel operators have bottomed out, and correspondent TV panel prices have risen since the second half of October.
Sales dynamics for TVs and monitors with high CP (cost-performance) ratios have started gaining momentum recently as current panel prices have made high CP display products more affordable, Pan said.
It is worth observing whether the sales of consumer electronics products during the forthcoming year-end shopping season in China, the US and Europe are robust enough to stir up panel demand in the first quarter of 2023, Pan commented.
Nikkei Asia reported on the 21st that the price of LCD panels for Smart TVs kept falling. Among the prices in June, that has been determined by panel manufacturers in China, Taiwan, South Korea, and TV manufacturer, the 55-inch Opencell price has decreased. The wholesale price of semi-finished products without backlight fell around 6 percent from May to around $90. The price has been declining for 11 consecutive months, continuing to rewrite the record low since the survey began in 2006. The price of 32-inch products for small-size TVs also dropped by 15 percent, setting a new record low.
The report points out that the price of TV LCD panels will continue to fall. Apparently, one of the strong reasons is continuous inflation. The continuous inflation has been deeply engulfing the world. The continuous health concerns, and the war, are leading to a major slowdown in the economy. There are rising doubts about the demand for TVs as the customer’s needs are changing. For instance, people are now considering essential goodies rather than spending on electronics when they already have one. For example, one user with a good Smart TV will think twice before upgrading to a new model just because yes. If the old model is serving well, then there is no real reason to upgrade due to technological upgrades.
However, there is still hope for small TVs. According to reports, panel factories in mainland China are reportedly expanding the production of 32-inch LCD panels. In the past, 55-inch products were the main priority due to their higher profit margin. However, the 55-inch panels now sit in unsatisfactory market conditions. Therefore, the factories will expand the supply of small products. After all, these smart TVs are commercialized at lower prices. Furthermore, some users are willing to save money no matter the display’s size.
Samsung, which always has been a strong maker in the LCD business, is shutting down the division.The company will focus on OLED and upcoming technologies. However, we don’t know if the costlier OLED TVs are in a better situation.
According to TrendForce"s latest panel price report, TV panel pricing is expected to arrest its fall in October after five consecutive quarters of decline and the prices of certain panel sizes may even be poised to move up. The price decline of IT panels, whether notebook panels or LCD monitor panels, has also begun showing signs of easing and overall pricing of large-size panels is developing towards bottoming out.
TrendForce indicates, with panel makers actively implementing production reduction plans, TV inventories have also experienced a period of adjustment, with pressure gradually being alleviated. At the same time, the arrival of peak sales season at year’s end has also boosted demand marginally. In particular, Chinese brands are still holding out hope for Double Eleven (Singles’ Day) Shopping Festival promotions and have begun to increase their stocking momentum in turn. Under the influence of strictly controlled utilization rate and marginally stronger demand, TV panel pricing, which are approaching the limit of material costs, is expected to halt its decline in October. Prices of panels below 75 inches (inclusive) are expected to cease their declines. The strength of demand for 32-inch products is the most obvious and prices are expected to increase by US$1. As for other sizes, it is currently understood that PO (Purchase Order) quotations given by panel manufacturers in October have are all increased by US$3~5. Currently China"s Golden Week holiday is ongoing but, after the holiday, panel manufacturers and brands are expected to wrestle with pricing. Based on prices stabilizing, whether pricing can actually be increased still depends on the intensity of demand generated by branded manufacturers for different sized products.
TrendForce observes that current demand for monitor panels is weak, and brands are poorly motivated to stock goods. At the same time, the implementation of production cuts by panel manufacturers has played a role and room for price negotiation has gradually narrowed. At present, the decline in panel pricing has slowed. Prices of small-size TN panels below 21.5 inches (inclusive) are expected to cease declining in October due to reduced supply and flat demand. As for mainstream sizes such as 23.8 and 27-inch, price declines are expected to be within US$1.5. The current demand for notebook panels is also weak and customers must still face high inventory issues and are relatively unwilling to buy panels. Panel makers are also trying to slow the decline in panel prices through their implementation of production reduction plans. Declining panel prices are currently expected to continue abating in October. Pricing for 14-inch and 15.6-inch HD TN panels are expected to drop by US$0.2~0.3, falling from a 1.8% drop in September to 0.7%, while pricing for 14-inch and 15.6-inch FHD IPS panels are expected to fall by US$1~1.2, falling from a 3.4% drop in September to 2.4%.
Compared with past instances when TV panels drove a supply/demand reversal through a sharp increase in demand and spiking prices, this current period of lagging TV panel pricing has been halted and reversed through active control of utilization rates by panel manufacturers and a slight increase in demand momentum. The basis for this break in decline and subsequent price increase is relatively weak. Therefore, in order to maintain the strength of this price backstop and eventual escalation and move towards a healthier supply/demand situation, panel manufacturers must continue to strictly and prudently control the utilization rate of TV production lines, in addition to observing whether sales performance from the forthcoming Chinese festivals beat expectations, allowing stocking momentum to continue, and laying a solid foundation for TV panels to completely escape sluggish market conditions.
The price of IT panels has also adhered to the effect of production reduction and the magnitude of its price drops has gradually eased. TrendForce believes, since the capacity for supplying IT panels is still expanding into the future, it is difficult to see declines in mainstream panel prices halt completely when demand remains weak. Even if new production capacity from Chinese panel factories is gradually completed starting from 2023, price competition in the IT panel market will intensify once products are verified by branded clients, so potential downward pressure in pricing still exists.
Recently, it was announced that the 32-inch and 43-inch panels fell by approximately USD 5 ~ USD 6 in early June, 55-inch panels fell by approximately USD 7, and 65-inch and 75-inch panels are also facing overcapacity pressure, down from USD 12 to USD 14. In order to alleviate pressure caused by price decline and inventory, panel makers are successively planning to initiate more significant production control in 3Q22. According to TrendForce’s latest research, overall LCD TV panel production capacity in 3Q22 will be reduced by 12% compared with the original planning.
As Chinese panel makers account for nearly 66% of TV panel shipments, BOE, CSOT, and HKC are industry leaders. When there is an imbalance in supply and demand, a focus on strategic direction is prioritised. According to TrendForce, TV panel production capacity of the three aforementioned companies in 3Q22 is expected to decrease by 15.8% compared with their original planning, and 2% compared with 2Q22. Taiwanese manufacturers account for nearly 20% of TV panel shipments so, under pressure from falling prices, allocation of production capacity is subject to dynamic adjustment. On the other hand, Korean factories have gradually shifted their focus to high-end products such as OLED, QDOLED, and QLED, and are backed by their own brands. However, in the face of continuing price drops, they too must maintain operations amenable to flexible production capacity adjustments.
TrendForce indicates, that in order to reflect real demand, Chinese panel makers have successively reduced production capacity. However, facing a situation in which terminal demand has not improved, it may be difficult to reverse the decline of panel pricing in June. However, as TV sizes below 55 inches (inclusive) have fallen below their cash cost in May (which is seen as the last line of defense for panel makers) and are even flirting with the cost of materials, coupled with production capacity reduction from panel makers, the price of TV panels has a chance to bottom out at the end of June and be flat in July. However, demand for large sizes above 65 inches (inclusive) originates primarily from Korean brands. Due to weak terminal demand, TV brands revising their shipment targets for this year downward, and purchase volume in 3Q22 being significantly cut down, it is difficult to see a bottom for large-size panel pricing. TrendForce expects that, optimistically, this price decline may begin to dissipate month by month starting in June but supply has yet to reach equilibrium, so the price of large sizes above 65 inches (inclusive) will continue to decline in 3Q22.
TrendForce states, as panel makers plan to reduce production significantly, the price of TV panels below 55 inches (inclusive) is expected to remain flat in 3Q22. However, panel manufacturers cutting production in the traditional peak season also means that a disappointing 2H22 peak season is a foregone conclusion and it will not be easy for panel prices to reverse. However, it cannot be ruled out, as operating pressure grows, the number and scale of manufacturers participating in production reduction will expand further and its timeframe extended, enacting more effective suppression on the supply side, so as to accumulate greater momentum for a rebound in TV panel quotations.
After a full year of rising LCD TV panel prices, the natural effect of rising prices on both supply and demand has kicked in, and prices are starting to fall, based on our latest update and forecast of LCD TV prices. The demand surge, which resulted from the COVID-19 pandemic, has eased and industry supply has caught up to demand. Prices in August and September are falling faster than expected and we now forecast that year-end prices will be lower than they were in December 2020, but still substantially higher than their all-time lows.
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LCD panel prices have risen for 4 months in a row because of your home gaming? Since this year, the whole LCD panel market has smoked. Whether after the outbreak of the epidemic, LCD panel market prices rose for four months, or the panel giants in Japan and South Korea successively sold production lines, or the Chinese mainland listed companies frequently integrated acquisition, investment, and plant construction, all make the industry full of interesting.
LCD panel prices are already a fact. Since May this year, LCD panel prices have risen for four months in a row, making the whole industry chain dynamic. Why are LCD panels going up in price in a volatile 2020? The key factor lies in the imbalance between supply and demand.
For larger sizes, overseas stocks remained strong, with prices for 65 inches and 75 inches rising $10 on average to $200 and $305 respectively in September.
The price of LCDS for large-size TVs of 70 inches or more hasn’t budged much. In addition, LTPS screens and AMOLED screens used in high-end phones have seen little or no increase in price.
As for October, LCD panel price increases are expected to moderate. The data shows that in October 32 inches or 2 dollars; Gains of 39.5 to 43 inches will shrink to $3;55 inches will fall back below $10; The 65-inch gain will narrow to $5.
During the epidemic, people stayed at home and had no way to go out for entertainment. They relied on TV sets, PCS, and game consoles for entertainment. After the resumption of economic work and production, the market of traditional home appliances picked up rapidly, and LCD production capacity was quickly digested.
However, due to the shutdown of most factories lasting 1-2 months during the epidemic period, LCD panel production capacity was limited, leading to insufficient production capacity in the face of the market outbreak, which eventually led to the market shortage and price increase for 4 consecutive months.
In fact, the last round of price rise of LCD panels was from 2016 to 2017, and its overall market price has continued to fall since 2018. Even in 2019, individual types have fallen below the material cost, and the whole industry has experienced a general operating loss. As a result, LCD makers have been looking for ways to improve margins since last year.
A return to a reasonable price range is the most talked about topic among panel makers in 2019, according to one practitioner. Some manufacturers for the serious loss of the product made the decision to reduce production or even stop production; Some manufacturers planned to raise the price, but due to the epidemic in 2020, the downstream demand was temporarily suppressed and the price increase was postponed. After the outbreak was contained in April, LCD prices began to rise in mid-to-late May.
In fact, the market price of LCD panels continued to decline in 2018-2019 because of the accelerated rise of China’s LCD industry and the influx of a large number of local manufacturers, which doubled the global LCD panel production capacity within a few years, but there was no suitable application market to absorb it. The result of excess capacity is oversupply, ultimately making LCD panel prices remain depressed.
Against this background, combined with the impact of the epidemic in 2020, the operating burden of LCD companies in Japan and South Korea has been further aggravated, and it is difficult to make profits in the production of LCD panels, so they have to announce the withdrawal of LCD business.
business in June 2022. In August, Sharp bought JDI Baishan, a plant in Ishikawa prefecture that makes liquid crystal display panels for smartphones. In early September, Samsung Display sold a majority stake in its SUZHOU LCD production plant to Starlight Electronics Technology, a unit of TCL Technology Group. LGD has not only pulled out of some of its production capacity but has announced that it will close its local production line in 2020. According to DSCC, a consultancy, the share of LCD production capacity in South Korea alone will fall from 19% to 7% between 2020 and 2021.
It is worth mentioning that in industry analysis, in view of the fact that Korean companies are good at using “dig through old bonus – selling high price – the development of new technology” the cycle of development mode, another 2020 out of the LCD production capacity, the main reason may be: taking the advantage of China’s expanding aggressively LCD manufacturers, Korean companies will own LCD panel production line hot sell, eliminating capacity liquid to extract its final value, and turning to the more profitable advantage of a new generation of display technologies, such as thinner, color display better OLED, etc. Samsung, for example, has captured more than 80% of the OLED market with its first-mover advantage.
From the perspective of production capacity, the launch of LCD tracks by major manufacturers in Japan and South Korea must reduce some production capacity in the short term, which to some extent induces market price fluctuations. In the long run, some of the Japanese and Korean LCD production capacity has been bought by Chinese manufacturers, coupled with frequent investment in recent years, the overall capacity is sure to recover as before, or even more than before. But now it will take time to expand the production layout, which more or less will cause supply imbalance, the industry needs to be cautious.
The LCD panel industry started in the United States and then gradually moved to Japan, South Korea, China, and Taiwan. At present, the proportion of production capacity in The Chinese mainland has reached 52% in 2020, and there are leading LCD panel products in China represented by BOE, Huxing Optoelectronics. Meanwhile, the production capacity layout of BOE, Huike, Huxing Optoelectronics, and other manufacturers has been basically completed, making industrial integration a necessity.
On the one hand, South Korean enterprises out of the LCD track, the domestic factory horse enclosure, plant expansion action. While LCDs may not sell as well as “upstart” flexible screens, respondents believe they are still strong enough in the traditional home appliance market to warrant continued investment. Zhao Bin, general manager of TCL Huaxing Development Center, has said publicly that the next-generation display technology will be mature in four to five years, but the commercialization of products may not take place until a decade later. “LCD will still be the mainstream in this decade,” he said.
On the other hand, there is no risk of neck jam in China’s LCD panel industry, which is generally controllable. In mainland China, there will be 21 production lines capable of producing 32-inch or larger LCD panels by 2021, accounting for about two-thirds of the global total. In terms of the proportion of production capacity, the Chinese mainland accounted for 42% of the global LCD panel in 2019, 51% this year, and will continue to climb to 63% next year.
Of course, building factories and expanding production cannot be accomplished overnight. In the process of production capacity recovery, it is predicted that there will be several price fluctuations, and the cost may be passed on to the downstream LCD panel manufacturers or consumers when the price rises greatly, which requires continuous attention.
LG Display and Samsung Display are struggling to find their ways out of the deterioration of their performance even after withdrawing from production of liquid crystal display (LCD) panels. The high-priced organic light emitting diode (OLED) panel sector regarded as a future growth engine is not growing fast due to the economic downturn. Even in the OLED panel sector, Chinese display makers are within striking distance of Korean display makers, experts say.
On Aug. 30, Display Supply Chain Consultants (DSCC), a market research company, predicted that LCD TV panel prices hit an all-time low in August and that an L-shaped recession will continue in the fourth quarter. According to DSCC, the average price of a 65-inch ultra-high-definition (UHD) panel in August was only US$109, a 62 percent drop from the highest price of US$288 recorded in July in 2021. The average price of a 75-inch UHD panel was only US$218, which was only about half of the highest price of US$410 in July last year. DSCC predicted that the average panel price in the third quarter will fall by 15.7 percent. As Chinese companies’ price war and the effect of stagnation in consumption overlapped, the more LCD panels display makers produce, the more loss they suffer.
As panel prices fell, manufacturers responded by lowering facility utilization rates. DSCC said that the LCD factory utilization rate descended from 87 percent in April to 83 percent in May, 73 percent in June, and 70 percent in July.
Now that the LCD panel business has become no longer lucrative, Korean display makers have shut down their LCD business or shrunk their sizes. In the LCD sector, China has outpaced Korea since 2018. China’s LCD market share reached 50.9 percent in 2021, while that of Korea dropped to 14.4 percent, lower than Taiwan’s 31.6 percent.
Samsung Display already announced its withdrawal from the LCD business in June. Only 10 years have passed since the company was spun off from Samsung Electronics in 2012. LG Display has decided to halt domestic LCD TV panel production until 2023 and reorganize its business structure centering on OLED panels. Its Chinese LCD production line will be gradually converted to produce LCD panels for IT or commercial products. TrendForce predicted that LG Display will stop operating its P7 Plant in the first quarter of next year.
Korean display makers’ waning LCD business led to a situation in which Korea even lost first place in the display industry. Korea with a display market share of 33.2 percent was already overtaken by China with 41.5 percent) in 2021 according to market researcher Omdia and the Korea Display Industry Association. Korea’s market share has never rebounded in for five years since 2017 amid the Korean government’s neglect. Seventeen years have passed since 2004 when Korea overtook Japan to rise to the top of the world in the LCD industry. Korea’s LCD exports amounted to more than US$30 billion in 2014, but fell to US$21.4 billion last year.
A bigger problem is that Korean display makers may lose its leadership in the OLED panel sector although it is still standing at the top spot. While Korea’s OLED market share fell from 98.1 percent in 2016 to 82.8 percent last year, that of China rose from 1.1 percent to 16.6 percent. Considering that the high-end TV market is highly likely to shrink for the time being due to a full-fledged global consumption contraction, some analysts say that the technology gap between Korea and China can be sharply narrowed through this looming TV market slump. According to industry sources, the Chinese government is now focusing on giving subsidies to the development of OLED panel technology rather LCD technology. On the other hand, in Korea, displays were also wiped out from national strategic technology industry items under the Restriction of Special Taxation Act which can receive tax benefits for R&D activities on displays.