TrendForce reports that while the immediate impact on this year's supply will be minimal, the closure will significantly affect the TV panel market in 2025. The facility, dedicated entirely to LCD TV panel production, is expected to reduce the total available market supply by nearly 5 million units next year, representing 2% of the global supply.
TrendForce’s latest insights reveal that, despite major sporting events traditionally boosting market demand, the uncertain global economic outlook might create a disparity between actual shipment volumes of LCD TV panels and the targets set by panel makers.
TrendForce reports that the utilization rates for the Gen5+ LCD panel industry (by area) are estimated to decrease by nearly 9.2 percentage points from the third quarter, reaching 72.2% in Q4.
TrendForce reports that panel makers are gearing up to transition from losses to gains in 2H23 by rigorously controlling production levels and producing on demand. The supply-demand ratio for Gen 5+ LCD panels in 2023 is predicted to be 2.1%—falling short of the balanced range of 3–5%—indicating a tight supply in the overall market.
However, after LG Display scales down its P6, P7, and Guangzhou LCD production lines, total output will still be much lower than the same period last year, according to TrendForce latest research.
The ongoing Russia-Ukraine military conflict and high inflation will continue to affect the global economy and politics during 2023. The recent decline of the global economy, in particular, has significantly dampened the outlook on sales of whole TV sets since the performance of the TV market primarily depends on consumer demand. Therefore, TrendForce projects that shipments of TV panels will fall by 2.8% YoY to a total of 264 million pieces for 2023.
TrendForce indicates, overall utilization rate of LCD large generational fabs of Gen.5 and above (in terms of wafer starts) slipping to 60% in 4Q22 cannot be ruled out, which would be the lowest level in the past ten years. Sluggish panel demand and the fact that most panel makers have officially turned from profit to loss in 2Q22 are the key factors forcing panel makers to take a more rigorous approach to production control in 2H22.
Moving into 2H22, terminal brands continue to adjust their inventory, not only weakening panel demand, but also inducing a sustained drop in panel quotations. The sharp increase in operating pressure affecting panel manufacturers has forced the display industry to restrain production. According to TrendForce's "Monthly Panel Supplier Utilization Report," utilization rate (calculated by the volume of glass input) in 3Q22 is expected to fall to 70%, a substantial decrease of nearly 7.3 percentage points from 2Q22.
