LCD panel prices rise: the global panel market may usher in a new turning point
Affected by the epidemic, at least five LCD display factories in Wuhan, my country, have slowed their production.
In addition, Samsung, LGD and other companies have reduced or closed their LCD LCD panel factories and other measures, reducing the production capacity of LCD panels.
Relevant industry insiders predict that after the supply of upstream LCD panels is reduced, global LCD panel prices will therefore see a temporary upward trend. However, when the epidemic is brought under control, LCD panel prices will drop.
Driven by large screens, although global TV sales have stagnated, the global TV panel shipment area has maintained steady growth.
On the supply side, under the pressure of continued losses, panel makers in South Korea and Taiwan are the first to adjust their production capacity.
Among them, Samsung Display has already withdrawn part of its production capacity, and LGD has not only withdrawn part of its production capacity, but has also announced that it will close its domestic production lines in Korea in 2020.
With the withdrawal of production by Korean manufacturers and the end of production capacity in mainland China, global LCD panel prices will rise in 2020 due to the impact of the epidemic, which is important for panel manufacturers that survive and keep their companies operating normally. Come huge profits.
The pandemic affects supply and stimulates panel price increases
According to the latest LCD TV panel report released by Qunzhi Consulting, affected by the epidemic, the price of LCD TV panels in February 2020 rose slightly higher than expected, with 32 inches rising by $1, 39.5, 43, and 50 inches each. Up 2 dollars, 55 and 65 inches rose 3 dollars each.
At the same time, the agency also predicts that LCD TV panels are expected to maintain an upward trend in March.
Analysis of relevant industry insiders indicated that under the superposition of various factors, the panel industry, which is rising against the trend, is expected to seize this wave of upside opportunities.
At the same time, the tight supply and demand has also prompted domestic panel companies to use this as an opportunity to increase their production capacity, and the global panel market may usher in a new turning point.
The LCD panel industry will usher in a long-term turning point
In 2019, the entire industry experienced widespread operating losses, and the prices of mainstream size panels fell below the cash costs of manufacturers in South Korea and Taiwan.
Under the pressure of continuing to lose money and make more losses, panel makers in South Korea and Taiwan have taken the lead in adjusting their production capacity.
Samsung Display SDC will close the L8-1-1 production line with a monthly production capacity of 80K in 3Q19 and the L8-2-1 production line with a monthly production capacity of 35K;
Huaying CPT shut down all 105K production capacity of L2 production line. LGD shows that LGD will shut down its P7 production line with a monthly production capacity of 50K and P8 production line with a monthly production capacity of 140K in 4Q19.
According to the strategy of SDC and LGD, they will gradually withdraw from LCD production capacity and only retain LCD production capacity.
Currently, the CEO of LGD has announced at CES2020 that all local LCD TV panel production capacity in South Korea will be withdrawn, and SDC will also gradually withdraw all LCD production capacity in 2020.
In terms of my country's LCD panel line, LCD production capacity expansion has also come to an end.
BOE’s 10.5-generation line in Wuhan will be put into production in 1Q20, and it is expected that it will take one year to ramp up the production capacity. This will become BOE’s last LCD production line.
Huike's 8.6-generation line in Mianyang will also start to ramp up production capacity in 1Q20. As Huike continues to lose money, it is expected that it is unlikely to continue to invest in the future.
China Star Optoelectronics' Shenzhen 11th generation line will be put into production in 1Q21. This will be the last LCD production line of China Star Optoelectronics.
Last year, the oversupply of the LCD panel market led to long-term low prices of LCD panels, and the profitability of enterprises was deeply affected by overcapacity.
In the short term, the global LCD panel production capacity improvement progress will be affected by the epidemic.
On the whole, the global supply of LCD TV panel production capacity is limited, and the tight supply-demand relationship has prompted a wave of price increases in the panel industry.
Under the tight supply and demand environment, domestic panel companies may use this as an opportunity to increase their production capacity.
In addition to short-term panel price increases, the display panel industry is also undergoing major changes, that is, Chinese LCD panel manufacturers are catching up with Korean manufacturers by virtue of cost competitiveness, production efficiency of new production lines, and supporting advantages in the industrial chain.
For related companies such as BOE and Huaxing Optoelectronics, in the face of the epidemic, adjusting their status and strategy to invest in the market may be able to win more shares.
Currently, my country's panel companies have caught up with Japanese and South Korean companies in LCD panel technology, and they have focused their layout on OLED technology.
Although the midstream OLED panel production capacity is basically in the hands of traditional LCD manufacturers such as Samsung, LG, Sharp, JDI, etc., the investment and growth rate of panel manufacturers in my country are also considerable, such as BOE, Shenzhen Tianma, and flexible screen 3D Curved glass Lens Technology has begun to lay out OLED production lines.
Compared with the mainstream position occupied by LCD panels in the global TV market, the impact of LCD for Samsung panels and terminal product markets is quite limited.
As a new generation of display technology, although OLED has driven the upgrade of the panel industry, the popularity of OLED panels in large-size TVs and smart wearable markets is far from fashionable.
Analysis of relevant industry insiders indicated that the panel price increase in 2020 has been implemented. If the price recovery trend continues, the performance of the leading companies in the panel industry will improve just around the corner.
With the popularization of 5G downstream terminal applications, the demand for panels for consumer electronics products will increase.
In the future, the global LCD panel market will gradually evolve into a competitive landscape where South Korea and China compete for hegemony.
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