Nearly One Year of Price Uptrend in TV Panel Market Has Been Disrupted by US$1 Drop in Average Quote of Medium-Size Panels This May, According to TrendForce

2 Jun

WitsView, a division of TrendForce, reports that quotes for medium-size LCD TV panels (the 40- to 43-inch bracket) are weakening, dropping by US$1 on average this May compared with the prior month. The LCD TV panel market has been a seller’s market for almost a year and prices have consistently gone up. The weakening of quotes for medium-size panels is a signal that the general price upswing may have reached a limit.

Several factors have led to price drops for certain size segments. TV sales in China during the Chinese Labor Day period in May fell short of expectations and caused rising inventory level for domestic brands. Furthermore, TV brands are seeing razor-thin margins for some of their products and thus want panel suppliers to share the cost burden by cutting prices. Also, additional production capacity from Chinese panel makers are quickly becoming available. Therefore, prices in a few size segments of the TV panel market are being lowered in response to the changes in the supply-demand situation.

Quotes dropped for medium-size panels and 55-inch UHD panels

WitsView points out that TV panels in the medium-size range are the first to be affected by falling quotes because TV brands have been under growing cost pressure for some time and the weak sales during Chinese Labor Day period have provided the opportunity negotiate down prices for panels belonging to the unprofitable size segments. Furthermore, the supply of medium-size panels is starting to grow. BOE Technology Group (BOE) has a new fab ready for the mass production of 43-inch panels in Fuzhou, China. Hence, quotes for medium-size panels fell by US$1 on average between April and May as supply is starting to overtake demand.

The average quote of 55-inch UHD panels has also seen a drop of US$1 in May compared with the prior month. Currently, 55-inch models account for more than 30% of new TV sets sold in China. The poor sales results during the Chinese Labor Day period therefore had a negative impact on the demand and inventory level of the 55-inch UHD panels. At the same time, China Star Optoelectronics Technology (CSOT) has added new 55-inch UHD panel capacity to its T2 fab in Shenzhen, China. The oversupply situation for this product category is thus being slightly exacerbated. On the other hand, the average quote of 55-inch FHD panels has been fairly stable in May because the trade volume for this product has been relatively smaller than UHD panels of the same size. The price negotiations for the 55-inch FHD panels have also been less noisy.

Though quotes have softened for medium-size panels and 55-inch UHD panels, WitsView believes a general price decline across the TV panel market is unlikely to happen. Pressures coming from some size brackets have different effects on individual panel makers and TV brands. Quotes and deal prices are still being determined on a case by case basis.

Steady price trend for the 32-, 49- and 65-inch segments

Most of the size segments in the TV panel are still exhibiting a stable price trend. Facing slowdown in the domestic market, Chinese TV brands are actively developing overseas markets and generating demand for 32-inch panels. Likewise, sufficient demand has kept prices of 49- and 50-inch panels constant. The 65-inch segment has seen sharp price hikes from the beginning of this year. Though the upward trend has ended in May, quotes for the 65-inch panels on the whole have remained steady as there is no pressure to force them to go down.