In this press release, TrendForce provides predictions of the information and communication technology industry for 2020, focusing on 10 key themes.
According to WitsView, a division of TrendForce, prices for mid- and large-sized LCD panels are unlikely to stop falling in 3Q19, mainly due to the trade war that raged on in 2Q. Some LCD brands have already stocked up beforehand as well as raised inventory levels of completed devices in North American regions. Adding the fact that brands are stuck with relatively high inventories of both panels and completed devices as a result of low demand, brands are reducing panel procurement for 3Q, causing restocking momentum to weaken.
WitsView , a division of TrendForce , says that demand for LTPS devices were previously expected to grow steadily in 2019 and cause utilization for LTPS production lines to climb. But due to the effects of the Huawei ban, LTPS area produced is expected to shrink starting from 3Q, with the annual area produced expected to fall by about 7.2% compared to 2018, arriving at just 8.3 million square-meters. This is the first time in recent years that LTPS area faces the risk of decline. However, it is worth observing whether panel demand will recover swiftly as the US relaxes for now the sales ban on Huawei in the wake of G20.
According to WitsView, a division of TrendForce, although the US-China trade dispute reached a ceasefire after the Trump-Xi meeting at G20, TV brands have been engaging in preemptive stocking in 2Q due to fears of a 25% tariff to be placed into effect in 3Q as well as Samsung Display's (SDC) original decision to shut down their Gen 8.5 L8-1-1 plant. This caused TV panel prices to plunge in June to an unforeseeable extent.
According to Witsview, a division of TrendForce, despite the relaxation of the US-China trade dispute in the wake of G20, demand for various end products in 2H will remain in a conservative mood until the situation becomes clear through subsequent negotiations, leading to a less-than-expected restocking demand for panels. Suppliers are already finding trouble profiting in 2Q due to continuously sliding panel prices. If the US-China negotiations hit a wall again, the continued trade conflict may drag down sales in the peak seasons of 2H. This may drastically raise the chances of panel prices crashing below cash costs and pressure businesses for the second half-year, forcing them to decide whether to reduce production.
