Yearly TV panel shipment for 2020 is projected to reach 267.53 million units, a 6.2% decrease YoY, while shipment by area is projected to increase by 0.7% YoY, coming to 169.6 million square meters, according to TrendForce’s latest investigations. The decrease can mostly be attributed to three factors: first, the trend of gradual increases in TV sizes; second, the slowdown in capacity expansions for panel fabs; and finally, the continued high demand for IT panels, the manufacturing of which crowded out fab capacities for TV panels. Furthermore, due to the aforementioned decreases in TV panel capacity and TV panel shipment, the glut ratio of TV panel shipment vs. TV set sell-in this year is projected to reach 24%, which is lower than the 2019 figure of 31%, thereby generating an upward momentum for TV panel prices.
TrendForce analyst Jeanette Chan indicates that, although LG Display has deferred the closure of its South Korea-based TV panel fab, LGD’s total TV panel capacity in Korea accounts for only 3% of the global total from all panel makers. As such, output from LGD is unlikely to change the present shortage situation in the TV panel market. Furthermore, the lower-than-expected pace at which certain panel makers have been increasing their production capacities in 2H20 is expected to result in a mere 1.1% HoH growth in overall TV panel capacity by area compared to 1H20.
On the other hand, the cyclical upturn in TV sets has ramped up the demand for large-sized display products, gradually pushing the average TV panel size towards 48.7 inches. However, given the manufacturers’ limited capacity expansion, the supply of TV panels has remained tight, and the glut ratio of TV panel shipment vs. TV set sell-in is projected to decrease to about 9% in 2H20. That means TV panel prices can rise by up to 30% and 10% QoQ on average in 3Q20 and 4Q20, respectively.
Although CSOT and HKC are expected to expand their panel capacities with the addition of the T7 fab for the former and the Changsha-based H5 fab for the latter in 2021, TV panel supply is still projected to undergo a 4.1% decrease YoY next year, reaching 256.64 million units, due to the closure of SDC’s Korea-based production lines this December and due to the fact that most panel makers have realigned their panel output to primarily IT products and ultra large-sized TV panels by now. In terms of TV panel shipment by area, total shipment is projected to increase by 3.5% YoY in 2021, reaching 175.5 million square meters. On the other hand, the average size of TV panels will likely further increase to 50 inches, while the interplay between supply and demand is expected to result in a 20% glut ratio of TV panel shipment vs. TV set sell-in in 2021 compared to 24% in 2020, meaning the market’s shortage situation is expected to persist.