Large-size LCD panel industry is expected to usher in the longest price increase cycle in a decade

by:Kimeery     2021-06-01

Upstream shortages intensify supply tightness

The driving force for this round of panel price increases is more complicated. Li Yaqin introduced that due to the impact of the epidemic, there is strong demand for IT products in the office, learning, and entertainment fields, and the three major application markets of notebook computers, monitors, and tablet computers will rise sharply in 2020. At the same time, the epidemic has spread to the upstream supply chain. In the context of strong terminal demand, the upstream supply chain has shown the characteristics of changes in the terminal market.

The supply-demand relationship in the semiconductor device market is relatively complicated. In addition to the demand for driver chips in the display market, other components, including SOC, wifi chips, and CPUs, affect each other, and have a relationship with display driver chips. Linkage. Since the second quarter of 2020, global 8-inch wafer production capacity has been tight. Experts predict that the tight production capacity will continue at least until the first half of this year.

The Cinda Securities Fang Jing team stated that according to industry chain research, the upstream panel material continues to be in short supply, and the shortage is expected to continue throughout the first quarter. At present, the inventory of mainstream panel manufacturers is almost zero, and the inventory of terminal TV manufacturers is still below the normal level.

For the recent 'panel shortage' in the supply chain, Zhang Hong believes that this statement is a bit exaggerated. Considering that the upstream IC and parts are out of stock, the supply is indeed tight, but it is expected that the supply and demand in the second quarter will gradually tend to Balance, the panel shortage situation will be alleviated to a certain extent.

The scale of TV shipments is expected to be lowered

Zhang Hong predicts that global TV shipments in 2021 will be reduced from the original 247 million units to 238 million units, a decrease of 3.1%. Among them, the Chinese market is expected to rebound slightly, but the strength is relatively limited.

For overseas markets, it is expected that TV shipments in 2021 will hardly increase significantly. There are two main reasons: First, driven by the rise of the housing economy, TV shipments in major overseas economies are strong, but some of the demand in 2021 has been fulfilled in 2020; second, the high panel prices have squeezed the profits of the complete machine manufacturers . This will push the whole machine manufacturer to adjust the strategy, thus affecting the demand.

Zhang Hong predicts that the actual production area of u200bu200bglobal LCDTV panels will increase by 6% year-on-year in 2021. The forecast takes into account multiple factors, such as the continued release of new production capacity in mainland China and the progress of capacity ramping; the impact of the delay in the exit of Korean factories' production capacity. Among them, South Korea's LGD production capacity will be increased, and SDC's plan to close the production line has been delayed. One of the 8.5-generation lines will be delayed until the end of this year.

The development of the TV panel market usually grows by an average of 1 inch per year. According to Zhang Hong, an increase of 1.8 inches in 2020 is expected to increase by 1.5 inches in 2021, making the average size of global LCDTV panels reach 48.6 inches in 2021. Size growth will consume more high-generation LCD production capacity. Calculated with an average size increase of 1.5 inches in 2021, it is expected that a G8.5 generation line with a capacity of 200K can be digested.

Improved profitability of panel makers

In the LCD panel market, large-size products dominate, and rising prices have significantly improved the operating conditions of panel makers. TCL Technology expects to achieve a net profit of 4.2 billion-4.46 billion yuan attributable to the parent in 2020, a year-on-year increase of 60%-70%. Based on this calculation, the company's net profit attributable to the parent in the fourth quarter of 2020 will be 2.175 billion to 2.435 billion yuan.

TCL Technology stated that TCL Huaxing maintained full production and continued to optimize its product structure. In 2020, its operating income increased by more than 35% year-on-year, and its net profit increased by more than 140% year-on-year. Among them, the large-size display business has benefited from the recovery of the industry. The prices of main products have continued to rise since the third quarter of 2020, and the net profit of the large-size business has increased by more than 6 times year-on-year; the small-size panel line is facing the production logistics and production caused by the epidemic in the region. The issue of personnel resumption of work has had a phased impact on performance.

The price of large-size panels is rising strongly. Comparing the final settlement price in December 2020 to the low point in May 2020, 32-inch HD panels have risen by 100%, 55-inch 4K panels have risen by nearly 70%, 65-inch panels have risen by nearly 40%, and 75-inch 4K panels have risen by nearly 20%. Both are the biggest gains in the past ten years. 'It is expected that TV panel prices will continue to rise in the first quarter of 2021, and TV panel prices will gradually stabilize in the second quarter.' Zhang Hong said that there will be downward adjustments expected in the second half of the year. Tao Yinzhi, an analyst in the electronics industry of Founder Securities, believes that the TV panel industry's competitive landscape has improved and the possibility of substantial price adjustments is low.

The boom in the large-size panel industry continues. 'The price increase of large-size LCD panels started in June 2020, and is expected to last for 10 months, which is the longest price increase cycle in 10 years.' Li Yaqin, general manager of Qunzhi Consulting, told a reporter from China Securities News that TV panels and display panels The price of mainstream products has risen by more than 50%, and some TV panels have risen by 80% to 90%.

Zhang Hong, TV research director of Qunzhi Consulting, said that the panel market faces many uncertain factors, especially the supply of core upstream components, which will have a greater impact on the supply of TV panels in the first and second quarters of 2021. Big. (China Securities Journal)

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