Chinese panel makers have cut production, LCD prices are expected to rebound in early 2020

Chinese panel manufacturers are aggressively expanding production capacity in order to seize market share, but this has also caused an oversupply of panels and a sharp drop in prices. However, recently, Chinese panel makers have begun to reduce the production of liquid crystal displays (LCD) to prevent the collapse of panel prices. Analysts expect that LCD panel prices are expected to rebound from early next year.

BusinessKorea reported on the 5th that since the second half of this year, Chinese panel manufacturers, which dominate the global LCD market, have reduced their LCD production capacity and moved to LCD for Samsung, including the world’s top TV panel shipments BOE has reduced the output of its 10.5-generation LCD production line by 25% starting in July, while China Star Optoelectronics (CSOT) and Huike (HKC) have also reduced the output of its 8.5-generation LCD production line by 10% and 20%, respectively.

The report pointed out that the current average price of LCD panels is still lower than the production cost. According to data from market research company IHS, in November last year, the average price of a 55-inch LCD panel was US$151, which fell to US$98 in October this year. As of the end of November this year, the price of 65-inch and 75-inch LCD panels has been shown for 14 consecutive months. Decline.

South Korea’s Shinhan Investment Corp. (Shinhan Investment Corp.) researcher Soh Hyun-chu l pointed out in a report released on December 2 that as LCD supply conditions stabilize, LCD panel prices will start next year Begin to improve at the beginning.

Soh predicts that the price of 32-inch TV panels shipped in the form of open cells (semi-finished products without backlight modules) will rise by 29% from US$31 in December 2019 and reach 40% in September next year. In US dollars, it is estimated that LCD TV panel prices will continue to rise from January next year and continue until September next year.

Soh mentioned that South Korean panel maker LG Display’s operating loss this year is estimated to exceed 1 trillion won. However, boosted by the rebound in LCD prices, LG Display’s profitability is expected to improve next year. It is that 80% of the company's revenue comes from LCD monitors.

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