Enter a new fluctuation cycle.
In the past two years, the panel industry has been in a rare cyclical fluctuation. As of the first half of 2021, the panel industry has experienced the longest boom cycle in more than a decade. However, the situation reversed in the second half of last year. By the first quarter of 2022, the LCD TV panel continued to decline, but the decline began to narrow.
Li Xiaoyan, senior analyst of TV panel of Qunzhi consulting, told the 21st Century Business Herald: “according to the statistical data of Qunzhi consulting, LCD (liquid crystal) in the first quarter of 2022 The price of TV panel still maintained a downward trend, in which the cumulative decline of small size in the first quarter was 5% ~ 8%; The price of medium and large-sized panels of 50 inches and above has decreased by 10% ~ 12%, while the price of LCD TV panel decreased by more than 25% in the second half of last year, and the overall decline is significantly mitigated compared with the second half of last year. “
Although the current large-size LCD panels are in oversupply, many institutions pointed out that the supply and demand tend to be balanced in the second quarter of 2022, and the panel price is expected to stabilize.
Earlier, Zhao Jun, COO of TCL Huaxing, said in an interview with the 21st Century Business Herald reporter that since July and August last year, there have been some changes in the supply and demand of large-size panels represented by TV panels, and the market began to callback from the high point. It entered a platform period at the end of last year, and there is limited room for further decline. It should be expected to show an upward trend in the second quarter. In Zhao Jun’s view, the fluctuation of the panel industry is slowing down, because the price correction is mainly due to the change of demand and the increasing concentration of production capacity.
In fact, the demand for TV has long been in the doldrums. Many external factors affect the consumer demand for end products in 2022. In recent years, it mainly depends on the trend of large-scale to maintain the increase of panel shipping area. The investment of panel manufacturers in large-size LCD panels has been reduced compared with the past, but the production capacity is still increasing. Recently, the 10th production line of Changsha Huike generation 8.6 line has been lit, and the main products are 4K, 8K and other ultra-high definition large-size display panels, and Youda optoelectronics announced the construction of generation 8.5 line.
Sigmaintell’s report points out that among large-scale applications, TV panels are the absolute main force of capacity removal. From the shipping area in the first three quarters of 2021, TV panel shipments account for more than 70% of all application panel shipments. In the future, the global display panel market is expected to continue to show the characteristics of cyclical fluctuations, TV panel still undertakes the important task of capacity removal.
According to the statistics of Qunzhi consulting, it is expected that the global display panel production capacity will reach a high-speed growth of 12% year-on-year in 2022, and the overall production capacity growth rate will reach the largest growth since 2013. Therefore, it can be predicted that the pressure on panel manufacturers to eliminate production capacity in 2022 should not be underestimated.
Panel manufacturers have also responded quickly in the past two years and will shift their sales from the TV market to the IT application market, such as computers, notebooks, car screens and other products. According to the data of canalys, a market research organization, the annual PC shipment reached 341 million units in 2021, with a year-on-year increase of 15%, and the annual sales revenue exceeded US $250 billion, with a year-on-year increase of 15%. For example, last year, Tcl Technology Group Corporation(000100) announced that it would build an it panel production line (T9 project) in Guangzhou, which is the production line of the 8th.6th generation oxide semiconductor new display devices, and also plans to expand the 6th generation line in Wuhan.
“Since the second half of 2020, the rise of panel prices, especially the price of large-size panels, has significantly improved the profitability of panel manufacturers. At present, panel manufacturers are still in the cycle of high profitability,” Qunzhi consulting pointed out, “Of course, we can’t ignore that the current price of large-scale panels continues to maintain a downward trend. It is expected that the profit challenge will be faced in 2022, the profitability of panel manufacturers will be divided, and some panel manufacturers may fall into loss expectations.”
In the turbulent external environment, this year will also test the manufacturers’ ability to grasp the supply chain. Although the price of panel is still fluctuating, Chinese panel manufacturers now dominate the LCD production capacity, especially the high concentration of TV panel. Therefore, in the new cycle fluctuation, we can also have a glimpse of the comprehensive adjustment ability of Chinese panel enterprises.
It can be seen that in order to cope with the risk of fluctuation, multi-level structural adjustment has also become a common trend of panel manufacturers such as TCL Huaxing and BOE. For example, reduce the proportion of TV panel capacity, increase the capacity of it panel, increase the proportion of medium and high-end products, and actively layout the OLED production line to obtain more profit space.
Li Xiaoyan told reporters that, on the one hand, due to the impact of geographical conflicts, the global TV market demand is not optimistic. Under the expectation that the overall supply is still loose, it is suggested that the panel factory should properly control the production capacity and reduce losses; On the other hand, in the period of bad market conditions, it is suggested to strengthen product R & D, actively promote product structure and technological upgrading, and improve product added value and overall competitiveness. At the same time, cost is the core competitiveness. Under the environment of many challenges faced by the global supply chain, we should strengthen the strategic cooperation with the upstream core manufacturers and establish a mutually beneficial community of interests in the supply chain.
