1. Price side
TV panel prices continue to rise. In 2024, small-size panels (32 inches) will rise by $1. Among medium and large-size panels, 43 and 50 inches will rise by $2-5, and 55, 65, and 75 inches will rise by $3-5. In the first quarter, panel prices experienced dramatic fluctuations, with a sharp decline, stabilization, and a strong rebound. Panel prices are rising in all sizes of TV panels. The main reasons include the annual maintenance of panel factories, which has reduced short-term supply, and factors such as increased terminal market demand and expectations of sports marketing activities have increased panel demand; at the same time, the operating strategy of panel factories has strengthened the recovery trend of the panel market by adjusting production and pricing. The above multiple factors have jointly promoted the price increase phenomenon and will continue to maintain.
3IT panels have structurally risen. Monitor panel prices will fully recover in 2024. From the demand side, due to considerations of panel supply and price trends, brands have fully started strategic advance stocking. From the supply side, under normalized production control, as the profit level difference between monitor and TV applications continues to expand, the allocation of monitor capacity is gradually squeezed, causing the monitor market to gradually tilt towards the supply side, and the market supply is gradually tight.
Notebook panel prices are slightly under pressure, terminal performance is still weak, the main brands are still strictly controlling inventory, and panel demand is still at a relatively low level. As new projects are gradually finalized in 2024, the fierce competition between panel manufacturers has been alleviated to a certain extent, and panel prices have gradually stabilized.
The current panel price is at the bottom of the cycle. As the turning point of the price recovery cycle becomes clearer, domestic manufacturers have taken the initiative to reduce the utilization rate of control panel production capacity, and overseas manufacturers have accelerated their withdrawal of production capacity. The supply and demand relationship continues to optimize, and the price recovery trend is gradually established.
2. Demand side
TTV panels are the largest downstream, and the recovery of TV demand has driven the overall panel boom to pick up. In 2024, the demand for LCD TV panels will reach 180 million square meters, a year-on-year increase of 9.6%. As a big year for sports events in 2024, the demand for advance stocking will play a role in driving TV demand.
The proportion of TV panel demand area in the total panel demand area is stable at more than 60%, and it is the main downstream of the panel. The early recovery of TV panels will play a positive role in the overall recovery of the panel market.
3. Supply side
Panel production capacity is transferred to the mainland, the share and dominance of mainland manufacturers are strengthened, foreign brand lines are closed and sought to be sold, and the share advantage of mainland manufacturers is further strengthened. According to reports in 24 years, Sharp will close its LCD factory in Japan. During the epidemic, the factory's gross profit margin was about 4.1%, which was significantly lower than the industry average of 13%. After the epidemic, the flat panel display panel (FPD) market fell into a downturn, and the gross profit margin fell accordingly. If Sharp permanently shuts down this part of the production capacity, it will be an important step in the integration of the industry.
In South Korea, due to the continued decline in TV panel prices during the epidemic, LG Display continued to lose money, with a high debt-to-asset ratio and rapid cash flow loss. According to data disclosed on the company's official website, LGD's gross profit margin continued to decline, from 1% to -25%. In order to improve its financial situation, LGD decided to reduce its LCD TV business and shift its focus to OLED, and sell LCD factories to use funds to layout OLED production lines.
According to data, 7th generation and larger substrates produced by Chinese factories account for 77% of global production. If SDP and LCD factories are closed, the production of such substrates will be more concentrated in China, approaching 85% of global supply. The pricing power of large-size panels and the concentration of the LCD industry of Chinese mainland TV panel suppliers such as BOE, CSOT, and HKC will be further enhanced. Chinese panel manufacturers occupy most of the global production capacity, and their voice continues to increase.
