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TrendForce indicates, overall utilization rate of LCD large generational fabs of Gen.5 and above (in terms of wafer starts) slipping to 60% in 4Q22 cannot be ruled out, which would be the lowest level in the past ten years. Sluggish panel demand and the fact that most panel makers have officially turned from profit to loss in 2Q22 are the key factors forcing panel makers to take a more rigorous approach to production control in 2H22.
According to TrendForce's latest panel price report, TV panel pricing is expected to arrest its fall in October after five consecutive quarters of decline and the prices of certain panel sizes may even be poised to move up. The price decline of IT panels, whether notebook panels or LCD monitor panels, has also begun showing signs of easing and overall pricing of large-size panels is developing towards bottoming out.
According to a TrendForce investigations, memory pricing began to decline from 4Q21 due to weakening demand for certain consumer electronics. Coupled with the impact of rising inflation, the Russian-Ukrainian war, and pandemic policies, demand in peak season was weak, resulting in inventory pressure that has extended from the buyer side to manufacturers. In response to the aforementioned situation, Micron announced last week that it would cut production of DRAM and NAND Flash, becoming the first major memory manufacturer to officially reduce its capacity utilization plan. In terms of NAND Flash, the market situation is more severe than that of DRAM. As the average contract price of mainstream capacity wafers has fallen to their cash cost and is approaching the periphery of selling at a loss for various manufacturers, Kioxia also announced that it will reduce NAND Flash capacity utilization by 30% from October on the heels of Micron’s announcement.
According to the latest TrendForce research, shipments of gaming monitors are in decline for the first time since the product category was launched to market, with 2022 estimates lowered to 20.5 million units, a 10% drop YoY. The primary reasons for this downgrade are intensifying inflation in Europe and spiking interest rates in North America which have upset and displaced demand for consumer electronics products. In addition, delays in launching high-end graphics cards has also led some e-sports consumers to consider postponing purchases.
According to TrendForce research, due to steady weakening of overall demand for consumer electronics, inventory pressure has increased among downstream distributors and brands. Although there are still sporadic shortages of specific components, the curtain has officially fallen on a two-year wave of shortages in general, and brands have gradually suspended stocking in response to changes in market conditions. However, stable demand for automotive and industrial equipment is key to supporting the ongoing growth of foundry output value. At the same time, since the creation of a marginal amount of new capacity in 2Q22 led to growth in wafer shipments and a price hike for certain wafers, this drove output value among top ten foundries to reach US$33.20 billion in 2Q22. Quarterly growth fell to 3.9% on a weakening consumer market.
