Demand for LCD panels from South Korean and Chinese TV makers was strong in Q4 2017, but implementation of their panel purchasing strategies for Q1 2018 may result in a correction as demand expectations change. While some TV brands are expected to maintain their panel purchasing plans, others are forecast to reduce demand in the first quarter as it is a traditionally slow season and some demand was pulled into the last quarter, according to IHS Markit. South Korean TV makers are expected to reduce LCD panel purchasing volumes by 3 percent in Q1 2018 compared to the previous quarter, or to increase by 1 percent compared to the same period last year. There is risk of a correction in demand as their panel purchasing plans get underway given that a sufficient supply chain buffer is already factored in for the first quarter. These manufacturers will likely continue to use their plans as a negotiating tactic for more competitive prices. This has been one of the most critical swing factors for the LCD panel supply and demand.
China’s TV makers are forecast to cut their LCD panel purchasing volumes by 30 percent in Q1 2018 over the quarter, and 5 percent over the year. Uncertainties about a stable supply of feature-rich premium and larger panels will have the top-tier TV brands concerned. Chinese panel makers have yet to prove that they will actually start mass-producing 65-inch LCD panels from the world’s first Gen 10.5 fabs in the first quarter. The top-tier TV brands will want to make sure they can secure sufficient panel supplies of 65-inch and larger panels. They also seek to attain better bargains on large and ultra-large panels in 2018 and beyond. Panel makers, however, have not agreed to offer more price concessions. Some panel makers are scheduled to remodel fabs in Q1 and this will eventually cause an unstable supply of LCD TV panels, particularly for larger sizes. The TV panel market will see chaotic swings in demand in the first quarter of 2018.