With the end of COVID-19 and high prices and interest rates, the global demand for TVS is plummeting. Accordingly, the price of LCD TV panels, which account for 96 percent of the total TV market (by shipments), continues to fall, and major display manufacturers are accelerating the pace of LCD panel production reduction.
According to the Chosun Daily on July 13, LG Display, BOE, CSOT and HKC have cut production of LCD panels for TVS since last month. And some domestic companies have cut production by as much as 50% and are restructuring.
LG Display
LG Display has decided to reduce the production of LCD panels for TVS by 10-20% in the second half of this year compared to the first half. Accordingly, production line utilization has been adjusted since last month. LG reduced the production of LCD panels by controlling the amount of glass substrates used in LCD panel production lines in Guangzhou, China and Paju, Gyeonggi Province.
BOE
Chinese panel companies are also accelerating production cuts. BOE decided to reduce the production of LCD panels for TVS by 25 percent in the second half of this year compared to the first half of this year. During the same period, CSOT also began to reduce production by 20 percent. They adjusted production to prevent falling prices due to reduced demand for LCD panels. HKC has cut production by 20% since May. From this month, Suzhou CSOT’s 8.5th generation production line (T10) has cut production by as much as 50 percent.
Display makers have started cutting LCD production because of falling demand for LCD panels due to falling sales of TVS. As TV demand fell, inventory of LCD panels began to increase, leading to falling LCD prices and depressed profits. Market research firm Jibang Advisors said: TV LCD panel prices have not bottomed out due to weak TV demand, manufacturers cut shipping targets and reduced panel purchases, but TV LCD panel prices have not seen the bottom yet.
According to WitsView reported, the prices for 43-inch LCD panels fell 4.4% month-on-month in the second half of June, while prices for 55-inch panels fell 4.6%. Over the same period, the 65-inch and 75-inch models also fell 6.0% and 4.8% respectively. The price of 21.5 inch LCD panels which used for monitors, fell 5.5 percent in a month. And the 27 inch LCD panels also fell 2.7 percent over the same period. The price of a 15.6 inch LCD panel for laptops also dropped 2.8 percent, while the price of a 17.3 inch LCD panel also dropped 2.4 percent. Since the second half of last year, the total price of LCD panels has been falling for more than 8-10 months.
Due to aggressive pricing policies by Chinese panel makers, LCD panel prices bottomed out in 2019. But there was a short-term uptick because of the surge in demand for TVS caused by COVID-19. However, with the disappearance of COVID-19 special needs, the LCD panel price began to fall heavily from the second half of last year to 2019 levels. In particular, since last month, the price of the products has fallen below the cost of the products, and the company is facing more losses as it produces more. This is that why domestic companies, which have been competing with production are cutting back.
Price stabilization is expected to begin first, as display manufacturers aggressively cut production. The industry expects prices to start to stabilize by the end of this month, with prices for all LCD panels flat through the end of the year, centered on large LCD panels 65 inches or larger.
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Post time: Jul-20-2022