Source to YICAI, LG Displays (LGD) has decided to halt the sale of its 8.5Gen LCD panel production line in Guangzhou, China. Earlier this year, there were rumors about LGD seeking potential buyers for this facility. However, as of September 25th, LGD has announced its intention to cease the sale and aims to achieve full production capacity by the next year. This decision reflects the overall resurgence in the global LCD panel industry. Nevertheless, there remain concerns about the stability of panel prices, given the uncertainty surrounding increased panel production capacity and the recovery of end-user demand in the coming year.

Amid the shifting landscape of Korean panel companies expanding their LCD panel business and a diversifying global panel supply chain, China’s leading panel manufacturer, which currently holds over 60% of global LCD TV panel shipments, must tread cautiously.

The LGD Guangzhou 8.5Gen panel plant marked LGD’s first overseas panel production facility and held high expectations. However, due to an extended industry downturn lasting for the past couple of years, LCD panel prices plummeted below production costs. South Korea’s other panel leader, Samsung Display, even closed all of its LCD panel production lines. In response, LGD downsized its LCD panel business and planned to shift its focus towards OLED panels. In this context, the capacity utilization of LGD’s Guangzhou 8.5Gen LCD panel plant fell to half, and rumors of seeking buyers emerged.

However, by the end of June this year, LCD panel prices rebounded from their low point, returning to profitability. As we approach the final quarter of 2023, with the current LCD TV panel market in a profitable state, LGD plans to restore full production in 2024, increasing its LCD panel output from 7 million pieces this year to 16 million pieces next year.

The rebound in LCD panel prices this year is not solely due to high demand, shifting the industry from oversupply to demand-matching supply. It’s primarily because major LCD panel manufacturers have rigorously controlled production capacity and reduced output, gradually warming up panel prices and restoring profitability to the industry.

In 2023, BOE, TCL, and HKC are expected to account for more than 60% of global LCD TV panel shipments. TCL, in particular, announced a change in its operational strategy in July, shifting from full production to adjusting capacity utilization dynamically according to market demand. The revival of the panel market in the first half of this year was a result of supply-side adjustments and optimizations, as external demand didn’t experience significant growth.

With China’s National Day holiday approaching, research organizations such as AVC and GfK predict a year-on-year decline in China’s TV market during the holiday season. Next year, if demand in the consumer electronics market doesn’t fully recover, and LCD panel manufacturers significantly increase supply, there may be concerns about maintaining stability in LCD panel prices. LGD has been less inclined to engage in price wars, and this includes global players like LG Electronics, Samsung Electronics, and Skyworth, who have substantial shipments in the global TV market. However, in a stagnant market, if someone increases supply, others may be compelled to reduce shipments.

According to TrendForce Research, TrendForce reports that panel makers chose to maintain the surge in TV panel prices by controlling production as Q3 approached. Contrarily, brands, in their bid to sustain sales momentum, have not been able to transfer increased panel costs to consumers in the form of retail price hikes. This precarious balance has driven many brands to the brink of financial losses for Q3.

Notably, as international brands boost shipments gearing up for end-of-year celebrations, and with China’s Double 11 shopping festival stocking peaking at the end of September, an 11.9% increase in Q3 TV shipments is anticipated, amounting to 52.24 million units. Still, this falls 1.3% short of TrendForce’s previous estimates. The persistent rise in panel prices in 2H23 will compel brands to trim down on less profitable product lines. Consequently, the annual global TV shipment forecast has been revised downward to 198 million units, a 1.5% YoY decrease.

Next year, LGD’s increased supply of LCD panels could potentially impact partnerships between Chinese panel manufacturers and brand customers. In the context of a globally diversified TV brand supply chain, China’s leading panel companies are also accelerating their overseas expansion efforts. TCL smartphone and TV LCD module production capacity in India is already operational, and they are collaborating extensively with Indian and Chinese customers, with utilization rates reaching 70-80%.

On September 8th, BOE announced that its first-phase project in Vietnam and its Mexican plant have begun mass production for customers. BOE also disclosed plans to invest in the second-phase project in Vietnam, mainly targeting increased demand in Europe, North America, and Southeast Asia, while leveraging advantages in overseas manufacturing costs and tariffs to promote high-quality development of overseas business.

(Source: https://www.yicai.com/news/101866356.html)

According to a report from Taiwan’s Economic Daily, TSMC’s 3-nanometer technology has attracted another heavyweight client. Following Apple and MediaTek, it is rumored that Qualcomm will also commission TSMC to produce its next-generation 5G flagship chip using the 3-nanometer process. The chip is expected to be unveiled in late October, making Qualcomm the third client for TSMC’s 3-nanometer technology.

In response to these rumors, Qualcomm has not provided any comments, while TSMC has chosen to remain silent. Industry experts speculate that TSMC’s 3-nanometer technology will likely attract additional orders from major players such as NVIDIA and AMD in the future. With various leading-edge fabs continuously seeking TSMC’s services, it appears that TSMC’s 3-nanometer technology remains the top choice for international giants.

Last year, Qualcomm unveiled its annual 5G flagship chip, the “Snapdragon 8 Gen 2,” manufactured using TSMC’s 4-nanometer process. The previous-generation Snapdragon “8 Gen 1” was produced using Samsung’s 4-nanometer process, but it encountered issues related to heat dissipation. Consequently, Qualcomm released an upgraded version, the “Snapdragon 8+ Gen 1,” using TSMC’s 4-nanometer process.

Qualcomm has traditionally adopted a multi-supplier strategy for semiconductor manufacturing. It is rumored in the industry that Qualcomm has privately informed its smartphone brand customers about the upcoming next-generation 5G flagship chip, the “Snapdragon 8 Gen 3,” expected to be announced in late October. This chip will be available in two process versions: TSMC’s 4-nanometer (N4P) and 3-nanometer (N3E).

(Photo credit: TSMC)

As costs continue to decline, it is projected that OLED technology will reach a 50% penetration rate in the smartphone market by 2023. Additionally, OLED is gradually making inroads into applications such as TVs, laptops, and tablets. According to TrendForce analysis, the current landscape of OLED technology presents various opportunities and challenges depending on the application. In the realm of smartphones, the number of OLED smartphone products is on the rise, and the technology is taking on diverse forms, including rigid OLED screens, OLED curved displays, and OLED foldable displays.

TrendForce predicts that by 2023, the penetration rate of OLED foldable smartphones will reach 1.6%, with sales volume increasing from 12.8 million units in 2022 to 18.26 million units. With advancements in OLED display specifications and increasingly competitive pricing, OLED foldable smartphones are poised to become mainstream in the market. Currently, the penetration rate of OLED foldable smartphones is relatively low, primarily because OLED technology has not fully met user demands for larger screens within the same form factor while maintaining affordability. This marks a significant development trend for foldable smartphones in the future.

In response to the ever-evolving landscape of smartphone screens and high consumer demand, panel makers are taking a multi-faceted approach to upgrading OLED technology. To achieve full-screen displays while ensuring quality in screen visuals and camera functionality, certain brands have begun utilizing hole-punch screens, integrating the camera beneath the display – a prime example being the iPhone 14 Pro series with its Dynamic Island. On the other hand, companies like Samsung, BOE, and CSOT are opting to forego punch holes altogether. Instead, they are enhancing screen transparency and incorporating the camera beneath the display by rearranging specific display area pixels and reducing size.

Panel makers are enhancing OLED technology to improve both lifespan and efficiency. They are adopting LTPO technology to dynamically adjust screen refresh rates, reducing power consumption. Additionally, for foldable screens, companies are eliminating polarizers, using color filters to reduce reflection, and switching to ultra-thin glass cover panels. These optimizations are in response to the varied demands of smartphone applications, and they signal the continued growth of OLED in future smartphone uses.

In the realm of TV, TrendForce thinks that COVID-19, geopolitics, and rising shipping costs, furthermore, companies have been focusing on the development of larger-sized TVs, particularly in the 65, 77, and 85-inch categories, causing the overall decline in the TV market in recent years. The OLED TV market is primarily dominated by Korean manufacturers LG and Samsung. TrendForce projects that in 2023, OLED TVs will account for approximately 2% to 3% of the overall TV market.

TrendForce suggests that Samsung and LG are currently enhancing OLED technology by adopting new materials and incorporating quantum dot technology to improve OLED’s luminous efficiency. This has led to an increase in the cost of OLED technology, which in turn has limited the widespread adoption of OLED TVs. However, with factors such as depreciation of production machinery, improved yield rates for OLED products, and streamlining of the production process, it is expected that OLED TV prices will gradually decrease in the future.

Monitor

In 2023, OLED display shipments are expected to reach approximately 530,000 units, marking a 342% increase by YoY. However, OLED displays are projected to hold only a 2% to 3% market share in the overall display market. Within the OLED display market, LG is poised to surpass Dell and become the brand with the largest market share due to its proactive deployment of OLED product lines and diversified product offerings, along with strong demand for 27-inch products in the market.TrendForce states that the future of OLED displays lies in larger sizes, necessitating the use of higher-generation panel production lines for efficient and cost-effective OLED panel manufacturing.

Notebook, Tablet

In the laptop and tablet arena, as compared to smartphones and televisions, the application of OLED technology has been relatively limited. However, according to TrendForce, OLED technology is beginning to transition into IT-related applications. This includes innovations such as OLED Tandem device structures, as well as recent developments like JDI’s photolithography eLeap and Visionox’s ViP. These advancements are set to significantly enhance OLED performance and lifespan. When these technologies are ready for deployment, they are expected to effectively reduce OLED costs and substantially increase OLED panel penetration in the IT market.

Notably, Apple has already integrated OLED technology into its iPad products, and the Apple brand’s influence is expected to drive other brands to adopt OLED technology, accelerating OLED’s penetration in the IT market.

Automotive display

In the realm of automotive displays and other applications, TrendForce envisions a future for OLED technology characterized by transparency, extended lifespan, and versatility to meet the demands of foldable displays, automotive displays, and transparent displays. In automotive displays, OLED features such as high brightness, wide viewing angles, high contrast, and a broad operating temperature range make it suitable for applications like rear-seat entertainment systems and in-car infotainment displays. In the realm of transparent displays, OLED’s high transmittance and ability to display real-time information make it suitable for use in automotive windshields, windows, and A-pillars. Additionally, in the domain of stretchable displays, flexible OLED screens can be stretched and slid while maintaining a consistent thickness.

Report to Voice, After the release of the Huawei Mate 60 Pro, various components have begun to experience the long-lost sensation of surging demand, replenishment, and stockpiling. With the launch of the Apple iPhone 15, the once sluggish global consumer electronics market has suddenly come back to life. The current mindset among storage manufacturers is clear: regardless of whether there is a real or perceived shortage, the goal before the year-end is to raise prices until they are no longer incurring losses.

Leading storage giants have gone through a series of price drops, losses, and production reductions, and are now officially entering the “price hike” phase. Samsung, SK Hynix, Micron, and others have already expressed their intention to raise NAND Flash contract prices.

According to TrendForce latest price projection on NAND Flash, in response to persistent softening in demand, Samsung has taken a decisive step: a sweeping 50% production cut from September, with the focus mainly on processes under 128 layers. Other suppliers are also expected to follow suit and increase their production cutbacks in the fourth quarter to accelerate inventory reduction. With this maneuver in play, Q4 NAND Flash average prices are projected to either hold firm or witness a mild surge, possibly in the ballpark of 0~5%.

YMTC now is facing surging demand from both smartphone and module manufacturers. It is reported that the production capacity for the period up to 1H24 has already been fully booked, with PC and server manufacturers sharing the capacity, while module manufacturers may receive a smaller share.

The current NAND Flash market situation is such that trying to negotiate increased supply with NAND Flash manufacturers like Samsung, Micron, and YMTC may yield little new capacity, and accepting higher prices may be inevitable.

The sudden pre-sale launch of the Huawei Mate 60 Pro has undoubtedly acted as a major catalyst for the current smartphone market. Without it, many smartphone supply chain companies believed that the smartphone market wouldn’t recover until the second half of 2024, and the most pessimistic among them even doubted if it would improve by 2024. The release of the Huawei Mate 60 Pro and the Apple iPhone 15 has injected a long-awaited warmth into the global smartphone market, reinvigorating the entire smartphone component supply chain.

In recent times, the top-tier iPhone 15 Pro Max from Apple’s iPhone 15 series is expected to be available only in November, which some interpret as a sign of strong demand. However, it is more likely due to production bottlenecks, particularly related to technologies like CIS, which have resulted in limited shipments of the iPhone 15 Pro Max. Overall, the estimated shipment volume for the iPhone 15 series may still reach up to 80 million units.

Is this resurgence in smartphone demand a lasting trend with increased consumer willingness to upgrade, or is it a temporary phenomenon? Optimists and conservatives hold differing views, but what is certain is that the global smartphone shipment volume has entered a mature phase, with limited room for significant growth driven solely by new features. However, the storage capacity in each smartphone continues to increase, providing substantial opportunities for existing supply chain manufacturers.

While new opportunities like automotive and AI have emerged, there is still no demand in any new field that can entirely replace the massive smartphone market. Therefore, the consensus within the global tech industry is that for the economy to rebound, the consumer electronics sector, particularly smartphones, is indispensable at this stage. AI and electric vehicles alone cannot take the place of smartphones. (Image credit: YMTC)

(Source: https://mp.weixin.qq.com/s/cb0kRUpWU6MElLNh9CR9eA)

Due to factors such as high inflation, sluggish demand in the consumer electronics sector, and other influences, the memory market has experienced a downturn. Major manufacturers like Kioxia and Micron began reducing capacity in the fourth quarter of the previous year, and in 2023, Samsung announced its entry into the production reduction trend. However, as market demand continues to weaken, the memory market in 2023 has yet to show signs of recovery, with prices continuing to decline and manufacturers facing operational pressure.

In this context, some memory manufacturers are hoping to stabilize prices and rebalance market supply and demand by continuing to reduce production.

According to reports from Taiwan’s media The Commercial Times,” DRAM manufacturer Nanya Technology is following the footsteps of major players by adjusting production capacity, lowering utilization rates, flexibly adjusting product portfolios and capex, and dynamically adapting to customer demands and market changes to cope with the weak market conditions. It is expected that production capacity will be adjusted dynamically, with reductions of up to 20%.

Previously, TrendForce’s research showed that due to DRAM suppliers initiating production cuts one after another, overall DRAM supply bits have decreased quarter by quarter. Coupled with seasonal demand support, this has eased the pressure on supplier inventories. It is expected that the price decline in the third quarter for DRAM will converge to around 0-5%. However, due to the fact that supplier inventories remain high throughout the year, there is still significant pressure for DRAM prices to bottom out and rebound, with the actual stabilization and recovery likely to occur in 2024.

As for NAND Flash, recent surveys by TrendForce indicate that, in response to the continued weakening demand, Samsung has announced an increase in production cuts starting from September, with reductions mainly focused on processes below 128 layers. Other suppliers are expected to follow suit and expand production cuts in the fourth quarter to accelerate inventory reduction.

As NAND Flash manufacturers expand their production cut efforts, TrendForce estimates that NAND Flash prices in the fourth quarter are expected to remain stable or see a slight increase, with an estimated increase of approximately 0-5%. However, if the upward trend in NAND Flash prices is to continue into 2024, it will still rely on sustained production reductions, as well as the observation of whether Enterprise SSD purchase orders will see a significant resurgence.

(Photo credit: Micron)