Display panel prices exhibited a remarkable QoQ increase in 3Q20, a rare occurrence in recent years, according to TrendForce’s latest investigations. In particular, prices for NB (notebook computer) panels increased by 5-10% QoQ during the quarter, while the corresponding increase in TV panel prices reached above 30%. Since the supply of large-sized panels is expected to exceed demand by a mere 0.2% in 4Q20, the shortage situation for certain panel applications is expected to persist, meaning panel prices may potentially increase by as much as 10% QoQ in 4Q20.
TrendForce Research Vice President Eric Chiou believes that TV panel quotes may remain at a peak level after continuously rising in 4Q20, primarily because the currently stable state of slightly tight supply is yet to be disrupted. Due to persistently high demand for IT panels, panel makers are yet to transition their production capacity from IT panels to TV panels on a large scale in the short run even though TV panels have been seeing a noticeable rise in both quotes and profitability. At the same time, the supply of TV panels has become somewhat constrained due to factors such as the shuttering of SDC’s panel manufacturing operations and the slight shortage in Gen 10.5 glass sheets. In light of these supply-side limitations, the global supply of TV panels is expected to decrease by 3.8% QoQ in 4Q20.
On the other hand, the most pressing concern on the demand-side of the market is whether TV brands will be forced to raise prices on their TV sets after TV panels undergo a significant price hike. The upturn in TV prices will likely hamper the sales performance of TV sets. Notably, channel distributors and TV brands have negotiated to suppress the upturn in TV prices until possibly early 2021 in the North American market, which is the market with the most remarkable sales performance globally this year. If retail pricing proceeds as negotiated, then the deferred price hike in TV sets, as opposed to an immediate price hike, will have less of an impact on TV panel demand in the short run. Although TV panel prices have now returned to their level from nearly two years ago, they may still increase by about 10% QoQ in 4Q20 due to the interaction of such factors as panel capacity allocation on the supply side and market uncertainties on the demand side.
With regards to the various IT panels, demand for NB panels remains high. More specifically, the shortage of 11.6-inch panels, which are highly correlated with Chromebooks, is unlikely to be fully resolved. As such, the 2-4% MoM increase in 11.6-inch panel prices is expected to persist until 4Q20. On the other hand, the overall demand for desktop monitor panels falls short of the demand for NB panels, but the tight supply of gaming monitors and curved monitors is expected to result in either unchanged prices or a slight QoQ increase for desktop monitor panels in 4Q20.