Gen 5+ LCD Panel Market Struggles to Meet Demand in 2023 as Suppliers Eye Profitability
July 13, 2023 | TrendForceEstimated reading time: 2 minutes
TrendForce reports that panel makers are gearing up to transition from losses to gains in 2H23 by rigorously controlling production levels and producing on demand. The supply-demand ratio for Gen 5+ LCD panels in 2023 is predicted to be 2.1%—falling short of the balanced range of 3–5%—indicating a tight supply in the overall market.
TV sales performed poorly in 2022 as a result of high inflation. Furthermore, high shipping costs for large-size TVs not only led to a reduction in panel demand but also caused panel prices to fall. Consequently, starting from 3Q22, panel makers adjusted their business strategy by initiating significant capacity adjustments to expedite inventory turnover and alleviate operational pressure. After two-quarters of stringent control measures, 1Q23 saw an appreciable reduction in inventory levels for both TV and IT panels. A seasonal slowdown in the first quarter saw the supply-demand ratio increase from -7.1% in 4Q22 to 0.6% in 1Q23, still below a balanced mean of 3%. As such, the market continues to remain in tight supply, laying the foundation for subsequent increases in panel prices.
TrendForce data reveals that there was 13% QoQ growth in major glass production lines in 2Q23. However, stocking demand for a number of applications also synchronously surged by 13.6%, leading to an almost steady supply-demand ratio of 0.5% compared to 0.6% in the first quarter. With the market supply under continuous strain, the prices of LCD TV panels, which comprise roughly 80% of the panel market capacity, continue to remain steady.
Panel makers are expected to increase production in the third quarter as financial pressures improve, but production control will continue as long as suppliers are unable to turn profitable in a single quarter. The supply-demand ratio is expected to rise to 3.3% in 3Q23, reaching a balanced range. The fourth quarter will be the final push for shipments this year. If panel makers wish to be profitable in a single quarter, they will need to diverge from previously strict strategies of controlling production in favor of pursuing profits. This could push the supply-demand ratio to potentially rise to 3.7%—well within the balanced range. It’s worth noting that TrendForce believes that the current supply-demand ratio for TV panels fails to fully reflect true market conditions. Instead, it has mostly become dependent on panel makers’ cautious control of production capacity over the past year. The capacity utilization rate of panel makers and fluctuations in terminal sales in 2H23 will be the key to determining market trends.
Suggested Items
IDTechEx Discusses Low-Loss Materials: The Enabler of Future Connected Vehicles?
05/06/2024 | IDTechExFuture connected vehicles will offer future drivers a safer, smoother, and more convenient driving experience. Not only will drivers get access to more navigation and entertainment options, but they will also gain access to safety technologies that will potentially reduce accidents, improve congestion, and reduce emissions globally by allowing vehicle safety systems to communicate with each other and with city traffic infrastructure.
HBM Prices to Increase by 5–10% in 2025, Accounting for Over 30% of Total DRAM Value
05/06/2024 | TrendForceAvril Wu, TrendForce Senior Research Vice President, reports that the HBM market is poised for robust growth, driven by significant pricing premiums and increased capacity needs for AI chips.
Tablet Shipments Show Signs of Recovery in Q1 2024
05/06/2024 | IDCAfter more than two years of decline, worldwide tablet shipments posted modest year-over-year growth of 0.5% in the first quarter of 2024 (1Q24), totaling 30.8 million units, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracker.
Industrial PC Market Size to Record $1.75 Billion Growth from 2023-2027
05/03/2024 | PRNewswireThe global industrial pc market size is estimated to grow by USD 1.75 billion from 2023 to 2027, according to Technavio. This growth is expected to occur at a Compound Annual Growth Rate (CAGR) of almost 6.29% during the forecast period.
Real Time with… IPC APEX EXPO 2024: Direct Imaging Equipment and Quad-wave DLP Light Engine Technology
05/03/2024 | Real Time with...IPC APEX EXPOGuest Editor Kelly Dack and MivaTek's Brendan Hogan delve into the company's innovative technologies, including direct imaging equipment and quad-wave DLP light engine technology. They highlight the benefits of direct imaging, compensation, and DART technology.