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2023/11/09
TrendForce reports that the utilization rates for the Gen5+ LCD panel industry (by area) are estimated to decrease by nearly 92 percentage points from the third quarter, reaching 722% in Q4 This forecast comes amid a backdrop of reduced TV panel procurement by TV brands, who are adjusting to operational pressures and rising inventory levels that began in the third quarter Additionally, signs of weakening IT panel demand emerged at the end of Q3 To prevent inventory carryover into 2024, panel makers have continued to regulate production throughout the fourth quarter
BOE began adjusting its production levels in the third quarter and will continue to do so in Q4, with an estimated decrease of 7 percentage points in utilization rates CSOT, on the other hand, maintained high utilization rates in Q3, supported by major customer stockpiling and the ramp-up of the T9 new production line However, due to reduced procurement of TV panels by both in-house group brands and international frontline brands, CSOT’s utilization rate is expected to decrease by about 17 percentage points to 76% in Q4
HKC, which still has two production lines not running at full capacity, anticipates a 14 percentage point decrease in its utilization rates for Q4 This is primarily due to the need to reduce production of one of its main products, the 32-inch TV panel, to alleviate inventory pressures and avoid significant price drops Additionally, there is a slowdown in stocking momentum for LCD monitor panels from their own ODM and the South China market
In terms of Taiwanese manufacturers, AUO has adhered to a strategy of not accumulating inventory, coupled with a reduction in the production of low-margin products that may lead to losses AUO's utilization rate is expected to fall by 14 percentage points from the previous quarter Innolux was affected by the shutdown of Fab4, expecting a 4 percentage point decrease in its utilization rate for Q4
Peak season stockpiling has concluded as we enter November, giving way to the traditional off-season, which will inevitably increase the pressure on factories Consequently, most panel makers are adopting a more conservative approach to production for 1Q24 Furthermore, several panel makers have indicated a two-week Lunar New Year shutdown for 2024 As a result, TrendForce anticipates that overall Gen5+ LCD panel utilization rates may be revised down to 70% or lower in 1Q24 to maintain the market supply-demand balance
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email the Sales Department at DR_MI@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit https://wwwtrendforcecom/news/
2023/07/12
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 21%—falling short of the balanced range of 3–5%—indicating a tight supply in the overall market
TV sales performed poorly in 2022 as a result of high inflation Furthermore, high shipping costs for large-size TVs not only led to a reduction in panel demand but also caused panel prices to fall Consequently, starting from 3Q22, panel makers adjusted their business strategy by initiating significant capacity adjustments to expedite inventory turnover and alleviate operational pressure After two-quarters of stringent control measures, 1Q23 saw an appreciable reduction in inventory levels for both TV and IT panels A seasonal slowdown in the first quarter saw the supply-demand ratio increase from -71% in 4Q22 to 06% in 1Q23, still below a balanced mean of 3% As such, the market continues to remain in tight supply, laying the foundation for subsequent increases in panel prices
TrendForce data reveals that there was 13% QoQ growth in major glass production lines in 2Q23 However, stocking demand for a number of applications also synchronously surged by 136%, leading to an almost steady supply-demand ratio of 05% compared to 06% in the first quarter With the market supply under continuous strain, the prices of LCD TV panels, which comprise roughly 80% of the panel market capacity, continue to remain steady
Panel makers are expected to increase production in the third quarter as financial pressures improve, but production control will continue as long as suppliers are unable to turn profitable in a single quarter The supply-demand ratio is expected to rise to 33% in 3Q23, reaching a balanced range The fourth quarter will be the final push for shipments this year If panel makers wish to be profitable in a single quarter, they will need to diverge from previously strict strategies of controlling production in favor of pursuing profits This could push the supply-demand ratio to potentially rise to 37%—well within the balanced range It’s worth noting that TrendForce believes that the current supply-demand ratio for TV panels fails to fully reflect true market conditions Instead, it has mostly become dependent on panel makers’ cautious control of production capacity over the past year The capacity utilization rate of panel makers and fluctuations in terminal sales in 2H23 will be the key to determining market trends
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms Vivie Liu from the Sales Department at graceli@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/05/08
The panel market has become imbalanced due to the continuous addition of new production capacities and a significant slowdown in demand post-pandemic In response, panel makers have effectively reduced inventory by lowering capacity utilization rates to below 70% in 2H22 A recent surge in demand for TV panels—coupled with increasing TV prices—is expected to push utilization rates for Gen 5+ LCD production lines (calculated by area) up to 77% in 2Q23 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
TrendForce further emphasizes that the current uptick in utilization rates is driven by actual demand for orders Consequently, it is believed that a healthy supply-demand ratio in the LCD market will persist in 2Q23 with rising utilization rates Panel makers must continue to exercise caution and control and adopt quick response strategies throughout 2H23 in order to maintain market balance
TV panel inventory has reached a healthy level after more than half a year of adjusting production In 1Q23, Chinese brands started stocking up early for the 618 Shopping Festival, driving up demand and causing TV panel prices to rise ahead of schedule This upward trend is expected to continue into 2Q23 TrendForce reports that over 90% of Gen 10x production lines are being devoted to TV panels, and it’s predicted that their capacity utilization rates are expected to grow by more than 10 percentage points QoQ, reaching up to 832%
The pandemic led to surging demand for LCD monitors and notebook panels, forcing most panel makers to reallocate a portion of their TV production capacity to IT projects Despite a resurgence in demand for TV panels contributing to the growth of Gen 8x utilization rates, the absence of significant growth in demand for IT products limited the increase in utilization rates to 76 percentage points, resulting in a 794% rate when compared to 1Q23 For Gen 75 and older production lines, the utilization rate is projected to climb to 60% due to growing demand in the smartphone panel repair market and a slight increase in demand for IT panels compared to 1Q23 Nevertheless, TrendForce maintains a conservative outlook on growth
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms Grace Li from the Sales Department at graceli@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2023/01/11
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 28% YoY to a total of 264 million pieces for 2023
However, the shipment performances of the LCD and OLED segments of the TV panel market will diverge dramatically during 2023 South Korean panel makers already started to leave the market for LCD panels in 2022 and are reorienting the focus of their product development efforts towards OLED Going forward, the growth and diversification of OLED offerings will definitely contribute to the increase in shipments of OLED TV panels Furthermore, Samsung Electronics has been proactive in the adoption of the QD OLED TV panels provided by Samsung Display Shipments of QD OLED TV panels are forecasted to increase substantially by 265% YoY for 2023 and thereby notably contribute to the projected YoY growth rate of 78% for the total OLED TV panel shipments in the same year The aforementioned development will also help slightly raise the OLED penetration rate in the TV panel market to 31% in 2023
Conversely, shipments of LCD TV panels will be more severely affected by the weakening economy This is because the LCD segment of the TV panel market has already reached maturity and is in plentiful supply Shipment of LCD TV panels are projected to drop by 31% YoY to 256 million pieces for 2023 However, the current market situation is favorable for panel makers to promote ultra large-sized TV panels despite the cautious demand outlook There are two reasons for this First, freight transportation fees are falling to their usual level Second, quotes for ultra large-sized TV panels have dropped to a sweet spot TrendForce is optimistic that the average size of LCD TV panels will grow this year The increase is currently estimated to come to 15 inches, thus expanding the average size of LCD TV panels to almost 50 inches
Chinese panel makers have a huge production capacity for LCD panels and remain highly competitive, so their collective market share for LCD TV panels is projected to climb further to 704% in 2023 Among them, BOE, CSOT, and HKC are expected to retain their positions as first, second, and third respectively in the ranking of LCD TV panel suppliers by shipments Chinese panel makers are also gaining a greater influence over the TV panel market as their supply concentration ratio continues to rise Turning to panel makers based in Taiwan, Innolux will be able to raise its market share for LCD TV panels to around 141% in 2023 The growth will be mainly attributed to the rerouting of the orders resulting from CEC-Panda scaling back its supply of 385-inch products As for AUO, its market share for LCD TV panels will also elevate slightly to 52% due to the growth of orders from its main clients
Regarding Korean and Japanese panel makers, LGD will see its market share for LCD TV panels retreat to 46% in 2023 since its P7 fab in South Korea produced its last batch of LCD TV panels in December last year Sharp has been facing weak demand for the products from its fabs in Japan, but more new products are being manufactured at its Gen105 fab in Guangzhou, China Taking account of these developments, Sharp’s market share is forecasted to reach 57% in 2023
TrendForce points out that based on current observations, the risk of a supply-demand imbalance is going to be higher for IT panels than for TV panels during 2023 Since TVs have larger screens, the consumption of production capacity proceeds at a faster pace for TV panels TrendForce is not ruling out the possibility that panel makers could adjust their product mixes to give more weight to TV panels if they find that the production capacity for IT panels has been idling too long Such development would certainly affect the future supply-demand dynamics of the TV panel market as well Moreover, panel makers will be under pressure to turn from loss to profit this year, so the strategy for adjusting capacity utilization rate will be very important to them If suppliers fail to maintain discipline, then the whole panel market will unlikely return to a balanced state in 2023
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms Grace Li from the Sales Department at graceli@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
2022/10/06
TrendForce indicates, overall utilization rate of LCD large generational fabs of Gen5 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
TrendForce states that the timing of purchasing volume adjustment on the part of IT brands lags relatively and its effect of shrinking orders quite sedate, resulting in the current market’s high inventory level still awaiting disposal Since Gen 5 to Gen 6 are the production centers of IT panels, 4Q22 utilization rate is expected to drop by 59 percentage points compared to 3Q22 to 482% due to weak demand
Although LG Display plans to close its P7(Gen75) production line in 1Q23, some products will be produced in advance of 4Q22, which will help bolster the production volume of Gen 7 to 75 TVs On the other hand, Innolux significantly reduced utilization rate in September as a response to market conditions In addition, leading monitor brands have increased the magnitude of purchase order correction in 2H22, affecting Gen7-75 production lines primarily focused on monitor panel wafer starts Therefore, utilization rate performance of Gen7-75 generational fabs is estimated to continue its decline and present a downward trend
HKC originally planned to increase wafer starts at each of its factories in 4Q22 However, due to some panel manufacturers recently planning to increase the price of certain TV panel sizes to accelerate the achievement of TV panel supply/demand equilibrium, the company has shifted to reducing wafer starts at all sites except its IT product focused Mianyang factory In addition, CSOT has also decided to take a one-week annual holiday in October, resulting in an estimated 16 percentage points quarterly decrease in overall Gen 8x utilization rate
Nearly 90% of Gen 10-105 production capacity is utilized for TV panels while only a small amount is used in the production of commercial display panels As quotations of 65-inch TV panels has been close to BOM cost, BOE and CSOT have decided to reduce production volume in response Wafer starts of BOE B17 in 4Q22 is expected to fall 142% compared to 3Q22, precipitating a 35 percentage points QoQ drop in Gen 105 utilization rate
As panel manufacturers implement production reduction plans in 2H22, the single-quarter supply-demand ratio has clearly settled and inventory deferred from 1H22 will experience declining levels along with significant drops in production Consumer demand will suffer as global economic and geopolitical risk remains high in 2023 Rising inflation will suppress consumer demand as the demand-side perspective remains neutral to conservative Although the supply side is constrained by the planned closure of LG Display, the addition of CSOT T9(Gen86) will drive overall panel supply higher compared to 2022 TrendForce indicates that this also means the market will continue to confront high oversupply risk next year If panel makers can maintain their low utilization rate strategy, it will be a great boon to the health of the industry
For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms Vivie Liu from the Sales Department at graceli@trendforcecom
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insidertrendforcecom/
