Accumulated Gap in LCD TV Set and Panel Shipments Expected to Hit a 10-Year High in Coming Quarters, IHS Markit Says

LONDON (June 21, 2018) – Despite better-than-expected first-quarter demand for thin-film transistor liquid-crystal display (TFT-LCD) TV sets and TV panels, market players would be well advised to adopt a more conservative outlook in demand growth for the coming quarters, according to IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions.

Earlier market expectations assumed that demand would slow in the first quarter prompted by the observation that TV set makers would put a hold on panel purchases based on hopes that panel prices would drop further. Such a view was largely attributed by the development of Chinese panel makers planning aggressive investments over the next two to three years.

As it turned out, panel makers managed to sell more panels than originally forecasted in the first quarter because panel prices declined much faster than expected. According to IHS Markit, TV panel unit shipments increased by 13.3 percent in the first quarter compared to a year ago, while TV set shipments rose 7.9 percent during the same period.

“LCD TV panel shipments are expected to grow faster than the LCD TV set shipments, expanding the accumulated gap between the two even further,” said Ricky Park, director of display research at IHS Markit.

According to the latest Display long term demand forecast tracker by IHS Markit, the accumulated gap between LCD TV panel and set shipments in the second and third quarters of 2018 is expected to be higher than past 10 years, reaching 8.3 percent and 8.4 percent, respectively, from 7.9 percent in the first quarter. Furthermore, the gap is expected to remain high until 2019.

“The main reason for the higher gap is the aggressive investment in 10.5 generation fabs. TFT LCD capacity, in terms of area, will soar in the next four years,” Park said. “As capacity is expected to increase more than demand, panel suppliers will likely push to sell panels at lower prices while set makers are to hesitate buying panels expecting the price to drop even further.”

However, when the accumulated gap in panel-set shipments is high, an inventory correction should always follow. “TV makers should narrow the gap for healthy inventory control and reducing panel orders is a step in that direction,” Park said. “If TV set makers’ panel purchasing drops, it will likely cause a cash flow issue to panel suppliers, and they would need to reduce the utilization rate to control the supply.”

 

Miss. Reily Peng

Hotline: 86 21 22317255

E-mail: reily.peng@reedkuozhan.com 

 

Reed Exhibitions Kuozhan is a joint-venture established by Reed Exhibitions (a world-leading exhibition and conference organizer) and Reed Exhibitions Kuozhan Co., Ltd. (a professional company focused on planning and organizing large and medium-sized exhibitions and conferences at home and abroad) in China in 2015. It is a world-leading exhibition organizer of the touch screen industry and one of the nine excellent member companies of Reed Exhibitions in China. At present, the company will host industrial exhibitions annually in Shanghai and Shenzhen, including the widely known C-TOUCH & DISPLAY, DISPLAY CHINA and FILM & TAPE. Apart from making the exhibition into a professional, one-stop and integrated industrial learning, procurement and experience platform, Reed Exhibitions Kuozhan will host various professional technical forums in the same period annually to attract professional visitors and buyers from the intelligent terminal, automotive manufacturing, industrial control, aerospace, media and advertising, medical and smart home industries at home and abroad, to gain an insight about the most comprehensive and advanced product and technology solutions, and actively promote the rapid development of China and the global optoelectronic display industry.

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