The supply of LCD TV panels is expected to gradually enter a tight supply state, especially from Gen8.5, which is a panel manufacturer in South Korea. TV panel prices are expected to show a gradual upward trend from the first quarter of 2020. At the same time, under the situation of large adjustment of panel capacity, it is expected that the market share of LCD TV panel shipments from China’s panel manufacturers will increase from 47% to 58% in 2020.
According to IHS Markit, which is now part of Informa Tech. Technology data, although the LCD panel production line continues to add, China’s new Gen10.5 and Gen8.6 lines, such as the New Gen10.5 and Gen8.6 production lines, will be in line with the growth in demand for large-size TV panels (e.g. 55 inches and above), but LCD TV panel shipments in 2019 are expected to remain unchanged from last year, at about 289 million pieces. The slowing demand for LCD TVs and the oversupply of LCD TV panels in 2019 have led to a rapid decline in the price of LCD TV panels. LCD TV panel makers have been forced to adopt aggressive factory restructuring plans and reduce production line activity from mid-2019 to balance supply and demand. Looking ahead to 2020, LCD TV panel manufacturers have developed a more conservative 2020 panel shipping plan.
In 2020, LCD TV panel shipments will be significantly reduced to 265 million pieces, down 8% year-on-year. It was the first annual decline since 2011 and growth was at an all-time low.
IHS Markit . . . “We know that we’re going to have to Since the launch of the Gen10.5 panel factory in 2018, Korean and Taiwanese panel makers, which own gen7 and Gen8 production lines for TV panel production, face stiff competition for large-size LCD TVs. The faster drop in the price of the 65-inch, 75-inch LCD TV panels on the Gen10.5 line has added to the competition. Eventually, South Korean panel makers began restructuring their panel lines, while Taiwanese panel makers reduced PRODUCTION of LCD TV panels by redistributing more display and laptop panel production. This is the background to the expected significant drop in LCD TV panel shipments in 2020. ”
As shown in the table below, IHS Markit Technology expects South Korea’s share of LCD TV panel shipments to be about 10 percent lower by 2020 than in 2019, while China’s share will increase by more than 10 percent. This is a clear trend, South Korean manufacturers gradually withdraw from LCD TV panel business, and mainland China continues to increase LCD TV panel business.
Although the volume of LCD TV panels has been eroded, shipments of larger LCD TV panels will continue to grow. IHS Markit . . . Technology expects LCD TV panel shipments of 65-inch and above to grow from 29.4 million to 37 million by 2020.
In addition, in response to the needs of leading global brands, in particular Samsung Electronics, LG Electronics and Sony, the panel factory will begin to significantly increase the shipment of 85-inch and 86-inch TV panels in 2020, which will effectively help de-chemical the production capacity of the 8.5 generation line. Coupled with the gradual closure of production line production capacity of Korean manufacturers, Gen7.5 and Gen8.5 production of a series of panels from 43 to 65 inches, is expected to gradually appear tight supply situation.
IHS Markit . . . Technology expects China’s panel maker, BOE, to account for 19 per cent of LCD TV panel shipments in 2019, followed by LG Display at 16 per cent and Innolux 15 per cent.
Chinese panel manufacturers are expected to increase their share of LCD TV panel shipments by 2020. IHS Markit . . . Technology expects BOE to account for 21% by 2020, followed by Huaxing Optoelectronics 16% and Group-Created Optoelectronics 15%. It is expected that by 2020, the three major Chinese panel manufacturers will rank in the top five in LCD TV panel shipments, namely BOE (21%), Huaxing Optoelectronics (16%) and HKC (12%).
At the same time, while LCD TV panel prices are falling for almost all of 2019 due to oversupply (only April and May saw a partial price rebound), it is expected to rebound in early 2020.
Panel factory in the 2020 business plan, based on the 2019 supply and demand situation, it appears to be relatively conservative. LCD TV panel shipments are planned to be 8% Y/Y lower than 2019 completions. Corresponding to the decline in supply, the whole machine manufacturers for the 2020 machine market demand seems quite optimistic. As shown in the table below, the world’s top five TV brands shipped 113.8 billion units in 2018 and are expected to reach 115.4 billion units in 2019, compared with 131.5 billion units in 2020, up 14% from 2019. Among them, such as TCL, Hisense, Xiaomi, etc. have set its 2020 LCD TV whole machine global shipments have double-digit growth target.
Global market leading TV brands, especially South Korea’s Samsung Electronics and Chinese brands, are aiming to expand their market share, but the main reason is that in view of the rapid decline in TV prices, in order to be able to maintain their revenue, increase the size of television shipments is necessary.
IHS Markit . . . “This shows that there is a lot of optimism about the TV brand in 2020,” said Xie Qinyi, general manager of research at Technology Display. With major sporting events such as the Tokyo Olympics (July-August) and the European Cup (June-July) in 2020, there are good reasons for the brand’s optimism. In addition, the global television machine market between 2010 and 2011 has a period of high shipping, 8 to 9 years later is also likely to usher in a wave of home TV machine replacement demand. The positive news on the demand side is expected to bring a more positive and stronger demand for the LCD TV panel market in 2020 than in 2019. ”
IHS Markit . . . Technology’s analysis of THE supply and demand of LCD TV panels for 2020 is as follows:
The demand for stock for major sporting events and the traditional sales season in the second half of the second quarter are expected to cause panel prices to rebound in the second half of the first quarter; So the price rebound is also expected to continue for the corresponding period.
After the sports event, the whole machine manufacturers will start to prepare for the second half of the sales season, so it can be expected that the full year 2020 demand may be sustained and out of the past two quarters and the second half of the sales season in the middle of the low season demand downturn.
On the supply side, while concerns about new capacity remain, the LCD TV panel factory’s 2020 shipments are down 8% year-on-year, taking into account the withdrawal of old capacity and the effective output of new capacity.
Some panel materials are also expected to face shortages in 2020, as the LCD TV panel materials supply chain in 2019 is facing pressure to reduce costs in panel factories, coupled with the gradual closure of The Korean TV panel factory, the panel materials supply chain will start to shake up in 2020. IHS Markit . . . Technology’s current analysis suggests that the creativity of the wafer foundry (Foundry) of the panel-driven chip, the photomask (Photomask) necessary for the process, and the high-order large-size polarizing plate and optical film may all face supply constraints in 2020.
And if the Korean panel factory more aggressive old LCD TV panel production line shutdown plan, do not rule out in 2020 in the TV panel area demand growth (large-scale development, etc.), the production capacity area growth is extremely limited. If so, the whole year TV panel supply and demand will be maintained tight situation, panel price increases will continue.
With this in mind, IHS Markit Technology predicts that LCD TV panel prices are expected to rebound after the Chinese New Year in 2020 and have the opportunity to sustain the upward trend into the second half of the year. But at the same time, under the pressure of the panel factory’s reflected cost, if the price of the TV panel rises rapidly in 2020 under the condition of psychological factors and repeated orders for panel purchases (over-booking or double-booking). It will also affect the profits of TV manufacturers and force TV manufacturers to repair their current relatively active procurement and shipping plans.
For this prediction, IHS Markit . . . “The gradual rise in prices is a hidden worry that the recovery of the LCD TV panel industry is better than the demand that has been reversed as a result of rapid price increases,” said Xie Qinyi, general manager of research at Technology Display. ”
Considering that next year’s new production capacity has BOE Wuhan 10.5 generation line, HKC Luzhou and Mianyang 8.6 generation line, as well as the launch of foxconn Guangzhou 10.5 generation line, the most ideal and more likely situation is that, in the strong demand situation, TV panel supply and demand for most of 2020 to maintain a balanced to tight supply and demand situation, panel prices also maintain a sustained upward trend.