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Company News >> LCD TV panel future supply and demand situation and price trend analysis
In the first half of 018, from the perspective of the global LCD TV shipments, the year-on-year growth rate still maintained a relatively large increase. However, due to the high proportion of small size, the shipping area has slowed down and the panel production capacity has increased. Deification is weak. In the face of declining panel prices and stimulation of sales targets throughout the year, the brand launched aggressive price promotions in the terminal market. The domestic market “6.18” promotions are in full swing, and the North American market also promotes in advance.
According to Qunzhi's "Demand and Supply Model," the supply and demand ratio of global LCD TV panels reached 9.4% in the second quarter of 2018, and supply and demand were seriously out of balance. The panel prices declined in April and May, and part of the size of the LCD TVs was in the fall. With the gradual start-up of stockpiling in the overseas market during the peak season, and panel makers constantly adjusting their production strategies, it is expected that the drop in LCD TV panel prices from June will be expected to narrow. In the third quarter, can the supply and demand situation restore balance, and can the panel prices stop falling and stabilize? Quzhi Consulting believes that the factors affecting the future supply and demand situation and price trends are mainly reflected in the following aspects:
1. Whether demand can achieve peak season effect.
Whether the brand's active price promotion in the terminal market can drive demand recovery is the most critical and most central factor in the market.
1 Can the global political and economic situation ease
In the second quarter of 2018, the entire industry experienced a complex situation, with multiple unstable factors superimposed on the global scale and the global political and economic structure oscillating. The dollar continues to strengthen, the financial markets of many emerging countries face a crash, and consumer purchasing power has declined. At the same time, trade frictions between large countries such as China and the United States have continued, and the risk of tariff fluctuations has increased, making the stocking strategy of channels and brands more conservative. Whether the global political and economic situation improves in the second half of the year is crucial to the restoration of confidence in the global TV market.
2 large-size demand can usher in the outbreak
The scale of the global TV market is difficult to achieve rapid growth, while the increasing panel production capacity of the higher generation mainly depends on the increase in the demand area for large size. Quzhi Consulting believes that on the one hand, brands should actively guide consumers to consume large screens; at the same time, they also need to actively cooperate with brands and panel manufacturers to promote the innovation of the size structure of the global TV market.
According to research data from Quzhi Consultation, over the past year or so, the growth in demand for large-size, especially 65" and above segments, has slowed, for example, 65" has remained in the total global TV panel shipments. About 4.4%. With the dramatic adjustment of the price of TV panels, the sales price of the whole machine has also come to RMB 4,000 or less. Can it drive the growth of demand for 65” in the third quarter?
In addition, the proportion of 32" has been maintained at more than 30% for more than 30 years, and the percentage is stable. Qunx Consulting believes that another more effective way to promote large-size is to promote medium-size alternative 32". For example, the proportion of 32" has fallen by 5 percentage points, and the shift in demand to 43% will drive the annual demand area to increase by 2.4% year-on-year, and the average size will increase by 0.5 inches. The pull of demand area will be very significant.
3 Changes in branding strategy
In the first half of 2018, despite the year-on-year increase in shipments of the global TV machine market, the performance of mainstream brands was still not as expected. At the same time, since the panel prices are in the down channel, the stocking strategies of the brands in the first half of 2018 are relatively conservative. The third quarter is a critical period for sales during the peak season. In the first half of this year, shipments are lower than expected. In the second half of the year, it will be more aggressive to spur BP for the full year. It is expected that the stock of brands will be relatively positive in the third quarter and will drive the gradual recovery of demand.
4 brand inventory digestion speed
According to Quzhi's consulting data, brand inventory maintained a relatively high level by the end of the second quarter. Among them, the inventory of international brands is about 10 weeks, while the inventory of domestic brands is maintained for more than 7 weeks. Can aggressive sales promote sales and gradually eliminate excess inventory?
2. Whether the supply capacity can be effectively controlled.
52018 LCD TV panel production area increased by 10.6% year-on-year
This year, the world's first 10.5 generation line production, in addition to CEC's two 8.6th generation line also began mass production and climbing, plus the 2017 production line to start climbing in this year, basically maintain full production activity, led the global LCD in 2018 The production area of ​​TV panels increased by 10.6% year-on-year, which was higher than that in other years. The main growth was from Chinese panel makers. However, the yield rate of the new production line cannot reach the average level in the industry. Considering factors such as the yield rate, Qunzhi Consulting expects the effective supply in 2018 to increase by 9.4% year-on-year.
6 panel manufacturers to promote product structure adjustment
In the second quarter, under the influence of rapid price declines, panel makers began to adjust their production structure and reduce actual supply. First of all, due to the relatively poor performance of the TV panel's profitability in various applications, the reduction in the production capacity of TV panels and the increase in the production capacity of IT and other applications. Secondly, panel makers are also continuously increasing their investment in new products and testing production capacity, taking up some of their production capacity. At the same time, in the TV panel product portfolio, size adjustments are made according to fluctuations in demand and prices. South Korea's panel makers continue to promote large-scale strategies, increase the oversized production capacity of 65" and above, and the mid-level national panel makers have actively reduced the production capacity by 32" and increased the medium-sized production capacity, such as 43" and 55". The panel manufacturers in Taiwan are continuously adjusting. Inventory structure. Will these measures be able to control the supply and demand in a wave of market volatility?
7 Capacity ramping progress of new production line
In 2018, new production lines were concentrated in mainland China. Although the market conditions are sluggish, the newly added production line is still the first priority for production ramp-up. It is expected that by the end of 2018, the 10.5 generation of BOE and the two of CEC will be 8.6. The surrogate line will reach the full production target, so the growth rate of production capacity in the second half of the year is also one of the important factors.
8 panel manufacturers consider adjusting the operating rate
After panel prices experienced this round of downward adjustments, mainstream size prices gradually approached cash costs, making LCD TV panels more productive and facing more losses. Hantai manufacturers are considering adjusting the production rate and controlling output by reducing production. However, due to the following impacts, the panel maker has not yet clearly planned to reduce production. First of all, the panel's stocking season is approaching. Panel makers have increased their confidence in the need for market recovery. Second, due to severe overcapacity, small-scale adjustments have a very limited impact on the market and will result in the loss of market share. Finally, the reduction in production. After that, because part of the fixed costs cannot be reduced, the total cost of the panel will increase, which will make it more difficult to make profits.
However, in any case, the supply and demand in 2018 was seriously out of balance. Qunxun Consulting believes that the proper adjustment of the current production rate is the most effective way to adjust the imbalance between supply and demand.
Affected by the above factors of the demand side and the supply side, whether the market can reverse the situation in the second half of the year and realize the supply balance remains uncertain. Qunzhi Consultation will continue to analyze changes in the market and make further research and forecast for the market supply and demand in the third quarter. Overall, Qunzhi Consulting predicts that the price of LCD panels will maintain a downward trend in the last 2 months, but the decline will be greatly reduced. The 32-inch panel price is already close to the cash cost. In particular, driven by the active adjustment of the production capacity of panel makers, it is expected that prices will gradually stabilize.

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