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Peak Season for LCD TV Panel Shipments May Not Materialize in Q3 Due to Excessive Shipments in First Half of 2015, Says TrendForce

16 July 2015 Display TrendForce

The latest report from WitsView, a division of TrendForce, finds shipments of LCD TV panels in June fell 0.5% monthly but increased 7.9% yearly, totaling 22.6M units. The shipments in the previous six months reached 132.3M units and fulfilled 52.5% of this year’s total LCD TV panel demand, which is estimated at 252M units. Historically, this is the first time that over 50% of a year’s total shipments has been achieved within the first six months of that year. This shipment result not only has set a record but will also create inventory issues that will affect the purchasing strategies of branded TV vendors in the second half of 2015. 

WitsView’s analysis further reveals that TV vendors had been aggressively stocking up panels since this year’s first quarter because of the shortages in the previous year, and this resulted in an unusually strong market during the off-peak season. Moreover, TV shipments in the first quarter dropped just slightly by 0.8% due to the strong efforts from vendors to reach their yearly shipment targets. Even though the base period is set higher for the second quarter, the quarterly TV shipments still posted a growth of 3.3%. 

Nonetheless, inventory pressures mounted for TV vendors during this year’s first half because the depreciation of the euro and the emerging markets’ currencies made the end market weaker than anticipated. By the end of the second quarter, TV vendors had an additional two to three weeks’ worth of panel stock compared with the first quarter. They therefore are gradually revising their shipment targets. Moreover, the accumulation of purchased panels in the first half of this year as well as uncertain market demands are going to affect vendors’ willingness to stock up. Based on WitsView’s projection, there might be a 0.7% quarterly decline in panel shipments in the third quarter, and this is quite unusual during the traditional peak season. 

WitsView’s third quarter forecast for LCD TV panel shipments finds that even as the market is preparing for the Black Friday sales as before, it will be relatively less thriving than it was in the same period of past years. This situation indicates the retailers are steadily becoming more uncertain about the end market demand. In the coming months, a series of shopper holidays will take place in China, including the Mid-Autumn Festival, National Day, Singles’ Day and Double 12. These retail events will be able to support TV panel demands to a certain level before the traditional peak season. However, the excess shipments during the first half of 2015 has led to a slow but ongoing increase in TV vendors’ inventories. Vendors will negotiate to lower panel prices in order maintain their margins. In sum, the panel market in this third quarter will not be as strong as in the previous third quarters because factors such as the general economic environment and fluctuating currency exchange rates will affect end market demand. WitsView also foresees serious challenges to market confidence in the fourth quarter. 

For the latest report on LCD TV panel shipments, please see WitsView’s Monthly LCD TV Panel Supply Chain Tracker. The report offers complete and up-to-date analysis on the display panel market. 

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