According to TrendForce, although the 1Q22 is a traditional off-season, thanks to the backstop of deferred order shipments and demand for commercial models, notebook panel shipments grew by 5.5% compared with the same period in 2021. However, the sudden outbreak of the Russian-Ukrainian war at the end of February poured oil on the inflation fire. The impact of China's lockdowns in 2Q22 led to a decline in the assembly capacity of ODMs and a rise in in-plant inventories. Terminal demand was arrested by the overall harsh economic environment. Rising inventory levels made it necessary for brands to further reduce panel purchases. Moving into 3Q22, the market continued to suffer from rising inflation and interest rate hikes, resulting in weak terminal demand and in high whole device inventory at the channel end, as well as high in-transit whole device and panel inventory. As distribution channels and brands actively reduce inventory, orders for notebook panels face sharp downward revisions. Shipments of notebook panels in 3Q22 is estimated to decrease by 13.4% QoQ to 45.1 million units, even lower than the 49.9 million units in the same 2019 period before the pandemic.
TrendForce further indicates notebook panel shipments came in at 15.6 million units in July, a decrease of 34.8% YoY, and also lower than the 16.3 million units shipped in July 2019 before the pandemic. Monitor panel shipments amounted to 11.7 million units in July this year, a decrease of 16.3% YoY, which was also lower than the 11.8 million units in July 2019, indicating that the present wave of client inventory adjustments is quite dramatic.
However, monitor panels were supported by branded manufacturers' back orders in 2Q22, and China's lockdowns had little impact on whole monitor assembly capacity, so decline in terminal demand and inventory issues did not materialize until 3Q22. As brands aggressively destock, monitor panel shipments will decline sharply in 3Q22, with shipments estimated at 31.3 million units, down 27.7% QoQ, and still lower than the 36.7 million units in the same period in 2019 before the pandemic.
Looking forward to 4Q22, TrendForce believes distribution channels and brands are still aiming to aggressively reduce whole device and panel inventories to reasonable levels before the end of this year. Therefore, demand for IT panels in 4Q22 will remain conservative. Shipments of notebook panels in 4Q22 are estimated at approximately 40.8 million units, down 45.6% YoY and 9.4% QoQ. Monitor panel shipments are estimated at roughly 29 million units, down 40.4% YoY and 7.2% QoQ.
For additional insights from TrendForce analysts on the latest tech industry news, trends, and forecasts, please visit our blog at https://insider.trendforce.com/