In another ominous sign for global TV industry supply, both demand and prices for TV-sized LCD panels continue to fall at the same time, recent reports from two display market analysts revealed.

Display industry market analysts TrendForce and Omdia each issued potentially troubling LCD TV display panel business updates this week as the global economic outlook continues to impact discretionary spending for non-essential items like TV sets.

The compounding effects of inflation, mounting signs of recessionary conditions ahead and on-going issues with shipping and logistics paint a gloomy picture for those looking to buy or sell a television set in the peak second half of 2022.

According to TrendForce, the outlook for purchases by TV makers of LCD TV display panels — the major component part for LCD-based TVs that represent the vast majority of the TV sets — continues to decline even as prices for most panel sizes have fallen to record lows.

Recently, it was announced that the 32-inch and 43-inch panels fell by approximately $5-$6 in early June, 55-inch panels fell approximately $7, and prices for 65-inch and 75-inch panels, which face mounting overcapacity pressure, were down $12 to $14, TrendForce said.

“In order to alleviate pressure caused by price decline and inventory, panel makers are successively planning to initiate more significant production control in [the third quarter of 2022],” TrendForce said. “..Overall LCD TV panel production capacity in [the third quarter] will be reduced by 12% compared with original planning.”

According Omdia prices for TV-sized LCD display panels have been falling for the first year since Covid-19 appeared, while the increase in display demand area is expected to be up just 3%, half of the previous year.

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On the other hand, OLED TV panel sales, which are a small proportion of the overall market, are expected to rise.

Similarly, Omdia’s forecast released Thursday showed global display sales this year would decrease by 15% from last year to $133.18 billion. That compares to the global display sales increases of 14% in 2020 and 26% in 2021 due to the surge in demand for LCD panels and TVs generated by lockdowns forced by the pandemic.

Omdia said LCD TVs are the display panel application that is expected to see the largest decline in sales among the various product categories.

LCD TV panel sales this year are expected to drop by 32% from last year ($38.3 billion) to $25.8 billion, according to Omdia’s predictions. The LCD TV panel demand area is expected to increase by 2% this year from last year, but the panel price decline is large.

South Korean display manufacturers LG Display and Samsung Display have been eliminating LCD panel production lines as profitability plummets.

TrendForce said Chinese panel makers account for nearly 66% of TV panel shipments, with BOE, CSOT, and HKC rated the new LCD panel industry leaders.

“When there is an imbalance in supply and demand, a focus on strategic direction is prioritized,” TrendForce said. “TV panel production capacity of the three aforementioned companies in [Q3 2022] is expected to decrease by 15.8% compared with their original planning, and 2% compared with [the second quarter.]

TrendForce said Taiwanese manufacturers account for nearly 20% of TV panel shipments, and allocation of production capacity among those factories is now subject to “dynamic adjustment.”

TrendForce said Chinese panel makers have already successively reduced production capacity, in accordance with the market conditions.
“However, facing a situation in which terminal demand has not improved, it may be difficult to reverse the decline of panel pricing in June.”

The firm said TV sizes 55 inches and below have “fallen below their cash cost in May (which is seen as the last line of defense for panel makers) and is even flirting with the cost of materials, coupled with production capacity reduction from panel makers, the price of TV panels has a chance to bottom out at the end of June and be flat in July.”

As for TV sizes 65 inches and larger, which come largely from the Korean brands, TrendForce said declining demand has forced TV brands to revise downward their shipment targets for this year, with purchase volume for the third quarter of 2022 significantly reduced.

“It is difficult to see a bottom for large-size panel pricing,” TrendForce warns.

However, the firm said, optimistically, “this price decline may begin to dissipate month by month starting in June but supply has yet to reach equilibrium, so the price of large sizes [65 inches and above] will continue to decline in [the third quarter].”

TrendForce said that as panel makers continue to significant reduce production, the price of TV panels 55 inches and under is expected to remain flat in through the third quarter.

“Panel manufacturers cutting production in the traditional peak season also means that a disappointing [second half 2022] peak season is a foregone conclusion and it will not be easy for panel prices to reverse,” according to TrendForce.

It is possible that if the supply/pricing pressures continue, the number, scale and duration of manufacturers cutting panel production output will grow in an effort to generate momentum for a rebound in TV panel quotations, TrendForce said.

Similarly, Omidia estimated “that each panel size will record a new low in the second half of the year.”

As reported by S. Korean technology trade news site The Elec, Omdia said the LCD TV panel shipment targets for BOE were lowered to 60 million units this year from the original 65.5 million units. HKC decreased its targets from 49.5 million to 42 million, CSOT from 45 to 44.8 million, and LG Display from 23.5 million to 18 million. Innolux’s shipment target increased slightly from 34.5 million units to 34.6 million units.

On the other hand, organic light emitting diode (OLED) TV panel sales this year are expected to reach $5.4 billion, up 12% from last year ($4.8 billion), according to Omdia.

OLED TV panels are being mass-produced by LG Display and Samsung Display, as both manufacturers reduce their exposure in LCDs. Samsung Display will end LCD TV panel production entirly this summer. However, LG Display’s OLED panel production forecast is 10 times that of Samsung Display.

Meanwhile, Samsung Display hiked yield rates for its new large-size QD-OLED panels from 30% of capacity initially, 50% in 2021, 75% in April-May 2022 to 80% now, according to South Korea-based publication The Bell.

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By Greg Tarr

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