Will LCD Panel Glut Mean Lower TV Prices In Q4?
The upcoming holiday season could be a very good time to purchase a new LED-LCD TV.
That’s because the global flat-panel television industry is in the throes of a display panel glut brought on by the recent openings of several very large mother glass-producing 10.5 Gen LCD panel fabs in China.
As a result, the cost of panels to LCD television makers has been reduced and panel supplies are growing just before the year’s busiest season.
According to a new study by display industry market research resource WitsView, a division of TrendForce, TV panel prices, in general, are being offered to TV manufacturers at lower-than-cash cost.
As a result, panel makers with established glass fabs have seen losses continually expand, resulting in the shut down of some production lines and in certain cases even entire glass plants. Some LCD panel suppliers in S. Korea, Taiwan and even China have had to start reducing utilization rates of TV panel products from September on in an effort to restore balance to the growing supply-and-demand situation and stablize prices.
As previously reported here, Samsung Display reportedly started massively reducing utilization or shutting down certain Gen. 7 and Gen 8.5 LCD panel lines in S. Korea in September and October as it acquired panels from a new Chinese 10.5 Gen fab with which it is partnered.
Reports out of Korea citing executives familiar with the plans say Samsung Display is adapting the old LCD panel lines to make new QD-OLED panels. Samsung has not issued any formal statement confirming the QD-OLED production plan, however.
Samsung Display’s Gen. 7 input is predicted to drop by more than 50% in September and October, and input of its Gen. 8.5 fabs is expected to fall by 30%~40%, WitsView said.
Meanwhile, the study said LG Display plans to shut down some capacity of its Gen. 7.5 Fab P7 and Gen. 8.5 Fab P8. The Fab P8 is projected to be left using only 25% capacity by the end of 2019, and its Fab P7 is expected by the analyst to shut down one-third of capacity in October.
In addition, Taiwanese panel maker AUO is reducing input in its Gen. 8.5 Fab 8A and Gen. 6 Fab 6B lines. The Fab 8A input is estimated at only 50% in the fourth quarter 2019 primarily because of lower 55-inch panel prices and poor demand. AUO’s Fab 6B line was predicted by WitsView to be reduced by 20% of input in the quarter as it moves down input of 65-inch panels.
China’s panel makers have also experienced losses from lowering panel pricing, but they have had scaled back product to a lesser degree than their Korean and Taiwanese rivals, WitsView said.
CSOT modified its machinery in Gen. 8.5’s Fab T2. Therefore, from September to the end of 2019, the input of Fab T2 is expected to drop by 20%. Gen. 10.5’s fab in Hefei of BOE Technology (BOE) and CEC-CHOT’s Gen. 8.6 fab both reduce their input by around 20% until the end of 2019. Sharp’s Gen. 10.5 fab in Guangzhou temporarily paused its plan to enter mass production phase in 2019 because TV’s market demand has been weak.
WitsView said China’s share of large-sized panel production by area might reach nearly 50% in 2020, making it the largest large-panel producing country in the world.
By Greg Tarr
Have a question for the HD Guru? HD GURU|Email
Copyright ©2019 HD Guru Inc. All rights reserved. HD GURU is a registered trademark.