Source: Tianji.com
Affected by the new coronavirus, production in at least five LCD display factories in Wuhan, China has slowed. In addition, Samsung, LGD and other companies reduced or closed their LCD LCD panel factory and other measures, reducing the LCD panel production capacity. Relevant insiders predict that after the supply of upstream LCD panels shrinks, global LCD panel prices will therefore rise temporarily. However, when the epidemic is under control, LCD panel prices will fall.
Driven by the big screen, despite the stagnation of global TV sales, the global TV panel shipment area has maintained steady growth. On the supply side, under pressure from continued losses, panel makers in South Korea and Taiwan have taken the lead in adjusting capacity. Among them, Samsung Display has withdrawn some of its production capacity, LGD has not only withdrawn from some production capacity, and has announced that it will close its domestic production line in 2020.
With the retreat of Korean manufacturers and the end of production capacity in China, due to the impact of the epidemic, global LCD panel prices will rise in 2020, which will bring rich profits to panel makers who have survived and kept the company operating properly.
Outbreak affects supply to stimulate panel prices to rise
The outbreak of the situation has led to insufficient start-up of the upstream and downstream manpower-intensive module factories, which has limited the supply of panels. It has caused a lot of impact on the panel industry with complex industrial chain links. From the perspective of panel factory shipments, due to the severe production capacity loss in the latter part of the panel in February, panel shipments in the first quarter will be greatly affected. At the same time, the epidemic situation has significantly affected the terminal retail market.
The epidemic has rapidly cooled the Chinese retail market, and demand for home appliances including smart phones and smart TVs has plummeted. However, it will take time for the changes in the end-consumer market to transmit the adjustments to the demand for panel purchases. According to the latest LCD TV panel report released by Qunzhi Consulting, due to the impact of the new coronavirus-infected pneumonia epidemic, LCD TV panel prices rose slightly higher than expected in February 2020, with 32 inches rising by $ 1 and 39.5, 43, and 50 inches each increasing. 2 dollars, 55, 65 inches each rose 3 dollars. At the same time, the agency also predicts that LCD TV panels are expected to maintain an upward trend in March.
In the short term, the new crown pneumonia epidemic will have a certain impact on the capacity of panel factories, but the epidemic will delay the resumption of the upstream supply chain of the panel, which may affect the panel supply in March. At the same time, the strong downstream stockpile demand will indirectly drive the panel price increase accelerate.
Relevant industry analysts said that under the favorable combination of various factors, the panel industry that is trending higher is expected to seize this wave of upward opportunities. At the same time, tight supply and demand has also prompted domestic panel companies to take this opportunity to increase their production capacity, and the global panel market may usher in a new turning point.
LCD LCD panel industry will usher in a long-term inflection point
In 2019, there was a general operating loss across the industry, and mainstream panel prices fell below the cash costs of Korean and Taiwanese manufacturers. Under the pressure of continued losses and more losses, panel makers in South Korea and Taiwan took the lead in adjusting capacity. Samsung showed that SDC shut down the L8-1-1 production line at a monthly capacity of 80K in 3Q19, and shut down the L8-2-1 production line at a monthly capacity of 35K; Huaying CPT closed all 105K capacity of the L2 production line; LG Display showed LGD In 4Q19, the P7 production line will be shut down at a monthly capacity of 50K, and the P8 production line will be shut down at a monthly capacity of 140K.
According to the strategies of SDC and LGD, they will gradually withdraw from LCD production capacity and only retain LCD production capacity. At present, the CEO of LGD has announced at CES2020 that all domestic LCD TV panel production capacity will be withdrawn, and SDC will also gradually withdraw from all LCD production capacity in 2020.
In China's LCD panel line, LCD capacity expansion is also nearing completion. BOE's 10.5 generation line in Wuhan will be put into production in 1Q20. It is expected that it will take 1 year to ramp up production capacity. This will become the last LCD production line of BOE. The 8.6 generation line of Huike in Mianyang will also start ramping up production capacity in 1Q20. Due to the continued loss of Huike, it is expected that the possibility of continued investment in the future is small; the Shenzhen 11th generation line of Huaxing Optoelectronics will be put into production in 1Q21, which will be the last LCD production line of Huaxing Optoelectronics.
Last year, oversupply in the LCD panel market led to long-term low prices for LCD panels, and corporate profitability was deeply affected by overcapacity. This year, a new pneumonia epidemic broke out in countries including China, South Korea and Japan. In the short term, the progress of global LCD panel production capacity improvement will be affected by the new crown pneumonia epidemic. On the whole, the global LCD TV panel production capacity supply is limited, and the tight supply and demand relationship has caused the panel industry to set off a wave of price increases. The tight supply and demand environment may prompt domestic panel companies to take this opportunity to increase their production capacity.
In addition to the short-term rise in panel prices, the display panel industry is undergoing major changes, that is, LCD panel makers in China are catching up with Korean manufacturers by virtue of cost competitiveness, production efficiency of new production lines, and industrial chain supporting advantages. For related companies such as BOE and Huaxing Optoelectronics, in the face of the epidemic, adjusting the state and strategy and devoting themselves to the market may win more shares.
At present, China's panel companies have caught up with Japanese and South Korean companies in LCD panel technology, and focused on the layout of 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 intensity and growth rate of panel manufacturers in China are also considerable. BOE, Shentianma, and flexible screen 3D curved glass Lansi , Has begun to lay out OLED production lines.
Compared with the mainstream status of LCD panels in the global TV market, the impact of OLED panels and end 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.
Relevant insiders analyzed 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 is just around the corner. With the popularization of 5G downstream terminal applications, the demand for consumer electronics products will increase. As new applications and new technologies continue to mature and government support continues to increase, this year's local LCD panel industry is worth looking forward to. In the future, the global LCD panel market will gradually evolve into a competitive landscape between South Korea and China.
Post time: Mar-04-2020