Source to UDN, in the wake of sluggish demand in the end-user market, the final stretch of September witnessed the tail end of a promotional surge in TV panel inventories as prices for panels below 50 inches seemed to reach a state of stagnation.

According to TrendForce’s view, Eric Chiou, Senior Research Vice President at TrendForce, has sounded the alarm, suggesting that TV panel prices may undergo a downward adjustment starting in November. This reflects a fourth-quarter demand that falls short of expectations, with continued weakness expected in the traditional off-season demand for the first half of next year.

Industry insiders contend that as TV panel pricing faces pressure to halt its upward trend, companies like AUO and Innolux, despite briefly enjoying profits this quarter, are likely to experience a downturn in their fourth-quarter performance, making it challenging to achieve an annual turnaround.

Eric Chiou analyzes that TV panel prices started rising in March this year. This was primarily a response to panel manufacturers’ consensus decision to reduce production after suffering heavy losses. However, due to the impact of a sluggish economy, terminal demand has failed to see significant improvement. Additionally, brand manufacturers, in response to rising panel prices, began planning early for the procurement of year-end panel needs in the second quarter and from July to August. This trend is already reflected in the pricing of TV panels below 50 inches, which has shown signs of stagnation since September.

In response to warnings from research institutions, it is feared that TV panel prices may cease to rise and may even decline in the fourth quarter. Yang Chu-hsiang, General Manager of Innolux, recently stated that the panel market’s prosperity is as unpredictable as a typhoon, and vigilance is required regarding the consumption power of the terminal market. He emphasized that panel manufacturers would not rush to maximize production but would instead make minor adjustments to meet demand steadily. He also reiterated the expectation that the second half of the year would be better than the first, with next year surpassing the current one.

During a recent earnings conference, the Chairman of AUO revealed that TV panel shipments increased by 5 percentage points in the second quarter. Coupled with cost-saving efforts, the operating gross profit turned positive for the quarter, and losses narrowed compared to the first quarter. Looking ahead to the third quarter, Peng remains optimistic, stating that “the worst time for the panel industry has passed.” With back-to-school and year-end sales seasons approaching, he anticipates that the “second half of the year will be better than the first.”

However, as the fourth quarter faces unfavorable global economic conditions, Eric Chiou believes that brand-end inventory for events like China’s Singles’ Day and the U.S. Black Friday promotions is taking a more pessimistic and conservative stance. September marks the tail end of the high-volume inventory period for TV panels, and with Chinese panel manufacturers having a significant share of TV products, they are expected to profit handsomely this season. On the other hand, Taiwanese manufacturers, with a relatively lower share of TV panel shipments, may hover near breakeven or see modest profits in the third quarter. If TV panel prices halt their upward trend in the fourth quarter, achieving the annual goal of returning to profitability may prove elusive.

(Source: https://money.udn.com/money/story/5612/7462519)

TV brands are gearing up for year-end promotions in August, driving the continued surge in TV panel prices seen in recent months. Despite concerns over rising costs and potential procurement reductions, panel manufacturers believe that strategic production control based on demand can maintain price momentum. August is expected to bring price increases of USD 2~10 for various TV panel sizes.

In the monitor segment, August might see moderate price increases. Commercial demand remains weak, while consumer demand surged in Q2, with modest growth projected for Q3. Price hikes for Open Cell panels are expected to be around USD 0.1~0.2. Quotations for panel modules indicate a USD 0.1 increase for 21.5-inch, 23.8-inch, and 27-inch sizes.

Notebook panel prices are slightly rising in August. However, due to strong second-quarter shipments and limited Q3 growth, price adjustments will likely focus on entry-level HD TN models. Manufacturers aim for comprehensive adjustments, projecting a USD 0.1 increase for both HD TN and FHD IPS models. The extent of these changes will depend on negotiations between manufacturers and brands.

TrendForce reported that TV panel purchases are gaining momentum in the early July, with both Chinese and other major brand customers increasing their orders in preparation for the busy promotional season in the second half of the year. Overall, the purchasing momentum is expected to grow by 7-8% in the quarter. The demand-driven growth, coupled with balanced supply and demand, is likely to sustain the upward trend in TV panel prices. For July, prices are projected to rise by $2 for 32-inch panels, $3 for 43-inch panels, $6 for 50-inch and 55-inch panels, $7 for 65-inch panels, and $8 for 75-inch panels.

Meanwhile, MNT panel prices have experienced slight increases, but the market demand for commercial models remains weak compared to consumer models. Consequently, the price hikes are expected to be modest, and various panel manufacturers are implementing different pricing strategies for different customers and sizes. For July, MNT panel Open Cell prices are expected to rise by approximately $0.2 to $0.5, while 21.5-inch module prices will increase by $0.2 and 23.8-inch module prices by $0.1. Prices for 27-inch modules will remain stable.

As for NB panel prices, after a stable period, panel manufacturers are contemplating raising prices in the third quarter. However, brand customers remain cautious about the demand for the second half of the year, resulting in ongoing negotiations with panel manufacturers. The demand for lower-end TN models is stronger than for higher-end IPS models, leading brand customers to tend to accept slight increases in TN panel prices. For July, mainstream sizes like 14-inch and 15.6-inch TN models are expected to see a minor increase of $0.1, while prices for IPS models will remain stable.

TV sales in China hit their peak in 2019, with 44.5 million units sold, but the market experienced a sharp decline in 2020. This was due to the previous marketing strategy of lowering prices to increase sales volume no longer being effective for small and medium-sized products. In response, brands shifted their focus to larger-sized products, specifically those with a screen size of 65 inches or above, which has accelerated the trend of larger TVs dominating the market.

Panel prices skyrocketed between 2020 and 2021, causing a significant price disparity for TV products during promotional events in China. In the 2021 618 promotion, 55-inch TV prices surged by 67% compared to the previous year, while 65-inch TVs increased by 50%, leading to a surge in demand for larger TV sizes. TVs with a screen size of 55 inches and above accounted for over 65% of the market share in China in 2021, and it is anticipated to reach 80% by 2022. With greater discounts, 65-inch TVs became the mainstream size in 2022, surpassing 55-inch TVs in sales volume and market share. The market share of smaller TVs (43 inches and below) fell from roughly 30% to 16%.

According to recent market research, the dominance of smart TVs has surged from 85% in 2016 to a staggering 98% in 2022. Additionally, the popularity of 4K TVs has risen rapidly, with an 80% market share in 2022, following their introduction in 2014. The shift towards these new TV standards has been fueled by ongoing price cuts in the retail sector and the growing demand for larger screen sizes.

The scale of promotions during China’s 618 and Double Eleven shopping festivals could be affected by the upward trend of larger screen sizes and the rise in panel prices in 2023. As a result, brands are expected to shift their promotional strategies towards larger TVs, particularly 75-inch and 85-inch models, which generate more revenue. Consequently, TV sales in China for this year are predicted to decline further by 1.7%, with an estimated sales volume of approximately 30 million units.v

According to TrendForce’s latest panel price analysis, due to the low inventory level of panel manufacturers and the strategy of maintaining production regulation, the overall supply and demand of TV panels have reached balance. With the strengthening of the stocking momentum for TV panels in China, the price increase trend of TV panels in April can still continue, but the price difference between first-tier and second-tier brand customers is relatively large.

Second-tier brand customers mostly can only accept the price increase of the panel manufacturers, while first-tier brand customers still have a certain degree of bargaining space. Looking at the TV panel prices in April, all sizes have maintained an upward trend, with 32 inches expected to increase by 1USD, 43 inches by 3USD, 50 inches by 6 USD, 55 inches by 7~8 USD, 65 inches by 13USD, and 75 inches by 10~11 USD. With this price increase trend, TV panel prices may have a chance to return to the cash cost level in May.

After the monitor panel prices stabilized in March, there are currently signs of strengthening demand for some consumer models, including high-end gaming monitors and some entry-level affordable ones. This is partly due to downstream customers replenishing inventory demand, and also preparing for the upcoming 618 promotion in China. Therefore, it is expected that the full-size monitor panel prices in April will remain stable.

Turning to notebook panel, Chromebook demand has rebounded in Q2, but other mainstream models are still affected by brand customers’ inventory destocking, leading to no clear increase yet. Therefore, notebook panel prices in April are expected to remain stable, with potential for increase depending on the timing of inventory destocking and demand momentum.