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TV Panel Prices To Fall Further Before Emergence Of Silver Lining

TV panel prices, which fell over 10 percent on average in the fourth quarter of 2018, will fall further in the first quarter of 2019 due to sluggish demand, but a silver lining is expected to emerge in the second quarter thanks to a production shift at Samsung Display, according to industry sources.

To mitigate the rising inventory and oversupply pressure for the first quarter, a number of flat panel makers have undertaken annual maintenance recently, so as to reduce their output, said the sources.

Some panel makers are also sparing time during the maintenance to take trial production on new products in order to shore up their profitability, the sources added.

For example, Japan-based Sakai Display Products (SDP) will also utilize the two-week maintenance which ends in mid-January, to undertake a transition to the next-generation production process to enhance its capacity of the offerings of new products such as 8K devices, according to sources at Foxconn, the parent company of SDP.

According to an industry estimate, SDP will reduce its output by 10-15 percent in the first quarter due to the annual maintenance. And overall, global panel supply will reduce by 5-8 percent in the first quarter thanks to efforts including equipment maintenance and new production trials.

Even so, the downward spirals for TV panel prices will not stop in the first quarter on weak demand, with prices for certain sizes likely to reach their cash-cost levels, said the sources.

In addition to TV panels, panel shipments for notebook and monitor applications will also decline sequentially in the first quarter, added the sources.

However, the range of reductions for 32-inch panels is likely to narrow in January as more 8.5G lines will shift focus to 65- and 75-inch models to cope with competition coming from new 10.5 lines to be unveiled by China Star Optoelectronics Technology (CSOT) and SDP, indicated the sources.

There is also a silver lining behind the otherwise gloomy price outlook for the first quarter. Starting the second quarter of 2019, Samsung Display will discontinue the production of LCD panels from its L8-1-1 production lines in Asan and shift the production facilities for the development of QD-OLED panels.

After the transition, the L8-1-1 fab will have a capacity of 30,000 substrates a month for QD-OLED panels instead of the current capacity of 80,000 substrates for LCD panels, indicated the sources.

Prices of TV panels could rebind from the second quarter due to reduced supply from Samsung Display, commented the sources.―Digitimes

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