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TrendForce: Chinese, Korean vendors may drive panel demand to a new high

4 September 2014 Display Burrell Liu

Global demand for LCD TV panels this year is beating analysts’ forecasts according to WitsView, a subsidiary of the Taiwan-based market intelligence firm TrendForce. In September, prices for medium and large-size panels including the 32”W, 39”W and 39.5”W as well as semi-finished products continued to rise on month to $1-$2. Prices for the 40" W and 42 "W stayed flat by contrast, although some customers accepted a $1 price hike for the 40”W. The 48”W and 50"W models continued to rise around $1-$2 each. Prices for the 55"W were unchanged. Monitor panels 19" W and 19.5"W saw further price hikes of $0.3-$0.5 due to a shortage of two different types of panels. Given robust demand, the supply crunch is expected to last for the remainder of the year. Meanwhile, prices for other sizes are staying relatively flat, rising just $0.1-$0.2. 15.6”W wedge and flat notebook panels increased slightly $0.3-$0.5 while 14.0"W wedge and flat rose $0.2. Lastly, 11.6"W, 13.3"W and 17.3"W did not change. 

“With China’s October 1 National Day holiday sales promotions going on, as well as Singles Day and Black Friday, LCD TV panel demand is more robust than expected,” said Burrell Liu, a research associate at WitsView. During this year's five-week promotional period (September 1-9 and 14; September 22-October 12), overall LCD TV panel sales will grow 4.2%, as Chinese producers only reached 38-40% of their full-year shipment targets in the first half and are thus motivated to accelerate their efforts to meet domestic shipment goals in the second half, Liu added. In addition, due to product differentiation strategies and limited panel supply from Samsung and LG Electronics, demand from the Korean electronics giants remains very strong for the 50”W. Thus, Chinese and Korean producers may drive panel sales to a second crescendo this year. At the same time, producers will continue to launch high color saturation and resolution products, Curve TV and the 43"W in an effort to maintain full production capacity. 

Tablet panel demand could fall for the first time this year as tablets face fierce competition from small notebook PCs and phablets (large-screen smartphones). In China, 4G subsidies will replace 3G subsidies as consumers eagerly await the release of the iPhone 6, impacting smartphone panel demand and brand strategies for panel procurement. 

Small and medium-size panel production is gradually refocusing on monitor and notebook applications, while the peak sales season is drawing to a close. As a result, IT panel prices may change significantly after October. That would be the first major movement in prices this year. 

WitsView raised its 2014 LCD TV shipments forecast to 212.5 million units, a 4.2% increase over the previous year, for a number of reasons. Those reasons include the high profits some brands are enjoying from the sales of small TVs, the rising preference for plasma display panels, the Mexican government providing subsidies to domestic producers and Chinese brands aggressively targeting the North American market for the first time. 

With many different market players competing for panel market share, a tension exists between supply and demand . Meanwhile, Korean and Chinese producers, which together hold 70% of the global panel market, have driven up panel prices since March. TrendForce advises market observers to closely watch market developments for the remainder of the year to see if panel prices peak for a second time. 

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