Despite previous expectations to shutter its LCD panel manufacturing operations, Samsung Display (SDC) will continue manufacturing panels in Korea, with a Gen 7 and two Gen 8.5 production lines operating throughout 1Q21, according to TrendForce’s latest investigations. However, in consideration of costs, technological transition schedules, and client demand for specific panel sizes, SDC is expected to retain manufacturing operations at only one Gen 8.5 production line in 4Q21. It should also be noted that, instead of being an indefinite extension, SDC’s continued panel manufacturing is expected to conclude by the end of 2021.
TrendForce analyst Jeanette Chan estimates SDC’s extended production time to last from April 2021 to 4Q21, with 3.2 million units of TV panels to be shipped during the period, accounting for 1.2% of the market total. SDC’s TV panel manufacturing is expected to provide some upward momentum for the industry as a whole, meaning global TV panel shipment for 2021 is expected to reach a similar level as the previous year.
Regardless, SDC’s plan to extend LCD manufacturing will have no noticeable effect on the supply and demand of display panels in 1Q21, primarily because it had already planned to supply about 1.8 million TV panels and 1.1 million monitor panels to Samsung Electronics (SEC) in 1Q21, (though these figures will likely be reduced to 1.5 million and 0.55 million), respectively, prior to its decision to extend LCD manufacturing from April 2021 to 4Q21. The reduction in shipment to SEC will not be compensated for until April 2021.
According to TrendForce’s predictive supply and demand model, which tracks large-sized LCD glass input by area and panel demand by area, the overall supply and demand of display panels in 2Q21 will, for the most part, remain in equilibrium. Despite a 2.2% increase in glass input by area for 2Q21 due to SDC’s delayed shuttering of LCD panel production lines, the risk of component shortages will still persist during the quarter. Moreover, the demand for TVs, monitors, and notebook computers will represent a certain amount of demand for display panels as well.
On the whole, although SDC has announced that it will sell all of its panels produced throughout 2021 to SEC, TrendForce still forecasts an oversupply situation for 2H21, since the increased panel supply from SDC certainly represents a potential risk that may disrupt the panel industry’s supply and demand equilibrium. Given the fact that SEC has historically been the largest purchaser of display panels, as the steady supply of panels from SDC increases, whether SEC will shift its panel purchasing strategies in response will remain an important point of observation for the panel market in 2021.