According to TrendForce’s latest panel price analysis, due to the low inventory level of panel manufacturers and the strategy of maintaining production regulation, the overall supply and demand of TV panels have reached balance. With the strengthening of the stocking momentum for TV panels in China, the price increase trend of TV panels in April can still continue, but the price difference between first-tier and second-tier brand customers is relatively large.

Second-tier brand customers mostly can only accept the price increase of the panel manufacturers, while first-tier brand customers still have a certain degree of bargaining space. Looking at the TV panel prices in April, all sizes have maintained an upward trend, with 32 inches expected to increase by 1USD, 43 inches by 3USD, 50 inches by 6 USD, 55 inches by 7~8 USD, 65 inches by 13USD, and 75 inches by 10~11 USD. With this price increase trend, TV panel prices may have a chance to return to the cash cost level in May.

After the monitor panel prices stabilized in March, there are currently signs of strengthening demand for some consumer models, including high-end gaming monitors and some entry-level affordable ones. This is partly due to downstream customers replenishing inventory demand, and also preparing for the upcoming 618 promotion in China. Therefore, it is expected that the full-size monitor panel prices in April will remain stable.

Turning to notebook panel, Chromebook demand has rebounded in Q2, but other mainstream models are still affected by brand customers’ inventory destocking, leading to no clear increase yet. Therefore, notebook panel prices in April are expected to remain stable, with potential for increase depending on the timing of inventory destocking and demand momentum.

Display panels contain certain semiconductor parts, including driver ICs, TCONs, and LCD PMICs; the price trends of these ICs used in different applications depend on their respective supply and demand situations. Not only has demand for driver ICs used for TVs, Chromebooks, and consumer IT displays declined ahead of other applications, but panel suppliers have also accumulated a considerable inventory of driver ICs for these aforementioned products, according to TrendForce’s latest investigations. Hence, these driver ICs may see their prices stagnate in 4Q21. Nevertheless, although driver IC suppliers will not be able to offload the foundry costs for driver IC manufacturing to panel suppliers entirely, panel suppliers are still expected to procure additional driver ICs in order to avoid possible shortages, since demand for commercial IT displays and driver ICs used in these displays still exists. TrendForce therefore expects driver IC prices to experience a minor price hike in 4Q21.

It should be pointed out that certain TCONs and LCD PMICs are experiencing either shortages or excessive lead times. Furthermore, TSMC will raise the prices of their mature foundry process technologies in 4Q21 by a relatively high margin. Taking these factors into account, TrendForce expects TCON and PMIC prices to remain in an uptrend for the quarter. With regards to smartphone TDDI, the decline in client orders for 4Q21 means that smartphone TDDI will not continue to undergo a price hike in 4Q21. Conversely, smartphone OLED DDIC prices are likely to remain bullish in 4Q21 for the following reasons: First, foundries’ production capacities for smartphone OLED DDIC are currently insufficient. Second, this product category involves a high level of technological barrier to entry in terms of IC design, meaning there are very few IC design companies capable of offering a stable supply of OLED DDIC; smartphone manufacturers are therefore scrambling to book OLED DDIC orders for next year’s handsets.

On the other hand, IC design companies have traditionally sold driver ICs, TCONs, and PMICs as a bundle to panel suppliers during shortages because bundling these components not only increases their sales volumes, but also ensures that panel suppliers receive these components in matching inventory levels. Despite rumors pointing to a possible price hike of driver ICs, TrendForce believes that, given the ongoing shortage of TCONs and PMICs, products sold as a bundle are likely to undergo successful price hikes.

After experiencing component shortages for more than a year, panel suppliers are projected to more carefully address issues of IC procurement and inventory management. On the whole, driver IC prices for 4Q21 will likely remain relatively unchanged from the previous quarter. Looking ahead to 2022, TrendForce expects the demand for display panels to trend downwards during the cyclical downturn of 1H22. This bear market, along with the fact that display manufacturers still need to use up their existing inventory of display panels, means that panel suppliers will almost certainly revise down their driver IC procurement. At the same time, as certain foundries gradually ramp up their driver IC production, the gap between supply and demand of driver ICs will in turn diminish. In other words, potential risks of driver IC shortage will also become slowly mitigated. For driver IC suppliers, their primary challenge for 2022 will be the ability to dynamically adjust their operations between peak demand and low demand periods. Consequently, IC suppliers that possess more robust operations and more diverse product portfolios will also hold the competitive advantage.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

Thanks to their continued capacity expansion and M&A efforts, Chinese panel manufacturers accounted for nearly 60% of the global supply of TV panels in 1H21, according to TrendForce’s latest investigations. These suppliers have not only managed to dominate their global competitors, but also become the key determinant of the supply and demand situation in the TV panel market. TrendForce believes that, while the TV panel market has started to experience a bearish trend, the industry must pay close attention to whether Chinese suppliers will eschew their previous strategy of maximum capacity utilization and instead turn to other options in order to maintain the health of the overall market. Taiwanese and Korean suppliers, on the other hand, have opted for a strategy that optimizes their existing operations by reallocating some of their production capacities from TV panels to other product categories such as IT panels. In addition to raising these suppliers’ competitiveness through better product differentiation, the reallocation of production capacity also alleviates the suppliers’ pressure of having to rely solely on TV products to expend their panel capacities.

Because the TV panel market’s out-of-balance supply and demand situation is unlikely to be resolved on its own, certain panel manufacturers have already begun assessing the feasibility of adjusting their production capacities for 4Q21. In particular, Gen 8.5 and Gen 10.5 production lines, which manufacture the majority of TV panels, play a key role in ensuring balance between the market’s supply and demand. While panel suppliers are expected to independently reduce their current capacity utilization rates, their new production lines will also gravitate towards a slowdown in panel output. Furthermore, ongoing issues with the supply of glass substrates will also constrain the capacity utilization rates of certain panel suppliers.

Taking the above considerations into account, TrendForce expects Gen 5 (and above) production lines to contribute to the supply of all display panels, measured by total panel area, by 2.5% less than previously expected for 4Q21. As well, in order to alleviate the pressure of excess production capacity for TV panels, panel suppliers will not only increase the share of 85-inch (and above) TV panels in their current output, but also reallocate some of their production capacities from TV panels to IT panels, including desktop monitor panels and notebook panels, both of which are currently in demand. These aforementioned assumptions would suggest that total TV panel input by area is expected to undergo a 2.1% QoQ decline for 4Q21. In particular, Gen 8.5 lines, which account for much of TV panel manufacturing, will experience the most noticeable capacity reduction at an 11.5% QoQ drop for 4Q21.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

The stay-at-home economy brought about a soaring demand for TVs, which in turn resulted in a shortage of TV panels in 2H20, according to TrendForce. Also contributing to the bullish rebound of TV panel quotes last year was the fact that most panel manufacturers rapidly decreased their supply of TV panels around this time.

After the upturn of panel quotes kicked off in late 2Q20 and came to a temporary slowdown at the end of the year, this upward momentum once again intensified in mid 1Q21 without warning, and clients on the purchasing end were caught off guard as a result.

TV brands are now at the mercy of panel suppliers since panels are an irreplaceable component in the production of TV sets. Being unable to effectively address the shortage and price hike of TV panels during the current surge in TV sales, TV brands have no choice but to react by buying up TV panels as they become available, thereby further driving up prices of TV panels.

Upward trajectory of TV panel quotes will likely taper in 3Q21 after TV brands successfully retool their procurement strategies.

The movement of prices in the panel market suggests that TV panel quotes will most likely peak at the end of 2Q21, plateau throughout 3Q21, and face downward pressure caused by an expected easing of demand for TVs in 4Q21. Although fourth quarters have traditionally been peak seasons for TV sales, TrendForce expects such major seasonal discounts as Black Friday sales to be cancelled this year in light of persistently high panel prices. TV sales in 4Q21 are therefore expected to be relatively muted as well.

On the other hand, as more and more of the general public receive vaccines, recreational activities, at least in developed countries such as the US, are expected to gradually move from the confines of indoor environments to the great outdoors.

Should this transition take place, TV brands and distributors alike will conservatize their outlooks of TV sales and of safe inventory levels, respectively, with brands lowering their panel procurement and distributors performing appropriate inventory adjustments. TrendForce analysts expect that TV panel quotes will enter a bearish trend in 4Q21 and gradually return to a cyclical downturn in 1H22.

（Cover image source: Samsung Newsroom Taiwan）

Owing to demand generated by the persistent stay-at-home economy last year and from the emerging markets in certain developing countries, global TV shipment for 2021 is expected to reach 223 million units, a 3.1% growth YoY, according to TrendForce’s latest investigations. The delay of UEFA Euro 2020 and the Tokyo Olympics until this summer will likely also play a role in driving up TV demand, regardless of whether live attendance will be allowed at the events. However, prices have increased repeatedly and considerably for not only IC components (used in TV set assembly), which are in shortage due to tight foundry capacities, but also TV panels. The price hike of TV panels has persisted since last June, with 32-inch panels, which are indicative of the rest of the TV panel market, reaching a massive 134% price hike for the period.

TrendForce’s investigations also show that the increase in panel prices has made it difficult for white-label manufacturers and tier 2/3 brands, which have traditionally relied on aggressive pricing to achieve their sales performances, to procure sufficient panels. Case in point, TV shipment from these companies has been gradually declining since last year. Conversely, suppliers have been giving major TV brands top priority ahead of the aforementioned companies to procure both panels and components because major TV brands generally place orders regularly and in large quantities. For the first time ever, the combined market shares of the top five brands, which are Samsung, LG, TCL, Hisense, and Xiaomi, surpassed 60% last year. This figure is expected to further increase to 62% in 2021, representing the fact that the TV market is progressively becoming an oligopoly.

As brands begin to favor large-sized products, 60-inch and larger TVs are expected to account for 17.7% of total TV shipment for the first time ever

With regards to various TV sizes, 32-inch panels have more than doubled in price since the start of the upturn last June. In response, TV brands have been transitioning their product lines to TVs that are at least 55 inches in size. More specifically, 55-inch TVs and ultra-large-sized TVs (60-inch and above) will account for 20% and 17.7% of the total TV shipment this year, respectively. Whereas the 20% shipment share of 55-inch TVs remained the same as last year, the 17.7% shipment share of ultra-large-sized TVs is 3.3% higher than last year’s figure. With regards to the annual shipment of ultra-large-sized TVs, 2021 marks a year of considerable growth compared to previous years, which generally saw YoY increases of 1-2%. This growth reflects the necessity for TV manufacturers to quickly leverage the consumer demand for large-sized TVs in order to maintain a stable growth in the industry, given the substantial price hike of TV panels.

As the difference between OLED and LCD panel prices narrows, TV brands are compelled to accelerate their OLED TV strategies

In response to the massive price hike of LCD panels, TV brands have begun to slightly raise the retail prices of TVs across various segments in order to keep up their bottom lines. However, if brands were to at once completely offload the increase in panel prices to the retail end, consumer demand would plummet as a result. A slow and gradual price hike is therefore expected to take place instead. Incidentally, it should be pointed out that the price hike of TV panels would be unlikely to stop in the short run even if the current panel shortage were alleviated in the future. As such, TV brands are expected to have limited room for profit growth in 2Q21.

The OLED panel market, on the other hand, has taken an opposite turn compared to the LCD market. For instance, prices of 55-inch UHD OLED panels were four times the prices of equivalent LCD offerings at the start of 2020, 2.9 times at the end of 2020, and 2.2 times in 1Q21, while prices of LCD panels underwent monthly increases. In addition to the narrowing gap between OLED and LCD panel prices, the panel industry’s production capacity for OLED panels saw a major boost thanks to the capacity expansion of LGD’s Gen 8.5 fab in Guangzhou. TrendForce expects OLED TV shipment for 2021 to reach 6.76 million units, a staggering 72% increase YoY, as OLED offerings become the top strategic priorities of TV brands in the high-end TV market this year.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com