Price of each size:
Small size: the price of small-size panel fell slightly in March, with a decline of less than 8.3%. It is expected that the short-term price is still under pressure. Mainly due to: on the demand side, under the influence of the situation in Russia and Ukraine, inflation and repeated epidemic, the demand for smart phone panel terminals is relatively weak, the terminal manufacturers control the inventory level, the procurement strategy is relatively conservative, and the terminal manufacturers intend to reduce the procurement cost; On the supply side, the supply of upstream tddi and DDIC slows down, and the effective capacity increases, but the product structure is dynamically adjusted. Overall, the supply margin of upstream parts and components is relaxed. Under the change of macro environment, the price of some size panels of 22q2 may face a slight correction in the short term, and the overall price is expected to remain stable.
Medium and large size: supply and demand loosened in March, and short-term prices were under pressure. The price began to decline in October 2021. From October 2021 to March 2022, the cumulative decline of tablet was 14.2% – 20.5%, and the cumulative decline of laptop was 7.5% – 19.4%. From the perspective of flat panel, the 21q4 promotion season has passed, and the demand in the post epidemic era is expected to fall as a whole. From the perspective of laptop, at present, the inventory of brand manufacturers and OEM panels has been at a high level for more than 3 months. At the same time, the shortage of chips (USB IC, CPU, etc.) has reduced the output of laptop OEM by 20% – 25%, and the panel preparation has gradually weakened; On the supply side, there is a shortage of DDIC supply. The laptop panel undertakes the conversion of TV panel production capacity, and the effective output continues to be released. In the future, the demand in the post epidemic era will return to rationality, and the willingness of brand factories to reduce inventory will drive the strategy of panel factories to become more radical. Both brand factories and panel factories will reduce the annual shipment target, and panel factories may adjust the production rate. We expect that the price of 22q2 is still under pressure, and the inflection point is expected to rise after 22q3; In the long run, it is expected that the demand will stabilize, the manufacturers will change production and the construction of new production lines will increase supply, the supply and demand will gradually become balanced, and the price will tend to be stable; At the same time, the competition among manufacturers intensifies, and the industry pattern may be reconstructed in the future.
In terms of large size: in this round of price cycle, the price of 32 “/ 43” / 50 “/ 55” / 65 has declined since reaching its peak in July 21. The cumulative change from July 21 to March 22 is – 57.3% / – 51.1% / – 59.0% / – 53.1% / – 40.1%. The cumulative decline since the beginning of the year is 0% – 4.5%. At present, the price is about the same as that in June 2020; The month on month change in March was 0.0% / 0.0% / – 1.2% / – 1.8% / – 1.7%, and the decline converged. We think it mainly comes from:
Under the influence of international turbulence, global inflation and other factors, the terminal demand is weak. South Korean brands accounting for more than 50% of the Eastern European market reduce their shipping targets and procurement plans, which affects the recovery rhythm of small and medium-sized demand. Under the weak demand of North America and China, the large-sized goods are insufficient. On the whole, brand procurement tends to be conservative; On the supply side, some panel manufacturers began to consider reducing the production rate from Q2, but the adjustment range was limited (according to cinno, the average production rate of TFT-LCD production lines in China in February 2022 was 86.1%, year-on-year -4pcts; several high generation lines in China reduced the production rate, which is expected to be 3 ~ 4% lower than Q1). The overall supply area of LCD TV is still high. According to the previous prediction of Qunzhi consulting, the supply-demand ratio of 22q1 / Q2 is 6.2% / 5.6%. At present, the supply and demand of Q2 will still be loose under the brand order cutting; In the future, we expect the price of TV panel to maintain a downward trend, in which “32” and “43” will maintain a small decline, and the decline of larger size is expected to gradually narrow. After Q2, the demand is expected to stabilize and pick up with the arrival of goods preparation in peak season.
Manufacturers’ data: in March, the capacity of China’s Taiwan panel factory remained stable. The price of most key companies in the panel market decreased compared with the same period after the price of the panel was adjusted. Among them, the panel company Youda optoelectronics was affected by the downward trend of panel price, and its revenue in March was – 8.71% year-on-year and + 9.28% month on month; Affected by the downturn of TV panel prosperity, the revenue of qunchuang Optoelectronics in March was – 22.8% year-on-year and + 8.99% month on month; Hanyu Caijing’s revenue in March was -42.56% year-on-year and +17.42% month on month due to the fall in large-scale prices. Polarizer company Lite optoelectronics had a year-on-year revenue of – 0.32% in March, BenQ materials had a year-on-year revenue of + 0.5% in March, which showed that the revenue of driving IC company Lianyong in March was + 30.86% and Tianyu in March was + 48.85% year-on-year.
Shipment of main products: TV panel shipment in February was + 6% year-on-year. On the whole, under the influence of factors such as international turmoil and global inflation, the terminal demand is weak. Korean brands accounting for more than 50% of the Eastern European market have reduced their shipping targets and procurement plans. Samsung has significantly reduced the total order volume of panel factories to 2.5 million pieces in March and April, and LG has also reduced the purchase volume of LCD panels in the second quarter to about 700000 pieces, affecting the recovery rhythm of small and medium-sized demand. Under the weak demand in North America and China, the driving force of large-sized goods is insufficient, At the same time, downstream manufacturers have a strong willingness to clean up inventory, and channels tend to be cautious. Head TV brands / OEMs have reduced orders, and TV panel shipments have weakened. In February, the monitor panel, notebook panel and tablet panel were + 24% / + 13% / – 44% year-on-year respectively. Mainly due to the continuous impact of covid-19 epidemic, the demand for online education / office is still strong, and the demand is driven by the stimulation of low prices. The shipment of monitor panel and laptop keeps growing year-on-year, the demand for tablet computers returns to rationality, and the shipment decreases year-on-year.
Update on the supply side and demand side: the epidemic rebounded in some regions in March, while the impact of the international situation spread, and there are variables at both ends of supply and demand.
On the supply side, Samsung display will withdraw from the liquid crystal display (LCD) business in the first half of the year and accelerate the transformation to OLED with qd-oled display. Youda accelerated the construction of Kunshan panel phase II project, the first batch of core advanced equipment officially entered the factory, and the project fully reached the annual production capacity of 560000 pieces after delivery. TCL Huaxing India production line will ship Samsung, and the production line is expected to achieve a small-size monthly production capacity of 2m in May The main structure of the first section of BOE Qingdao module plant is capped and is expected to be put into operation in 2023, which will achieve an annual output of about 150 million display modules of various sizes.
On the demand side, global TV shipments in 2022 are expected to be – 2.6% year-on-year. According to the report of AVC Revo, the global TV shipment in 2021 was 214.5m, a year-on-year decrease of 6.2%; The shipping area was 148.6m ㎡, a year-on-year decrease of 0.7%; The average size of shipments was 48.3 “, with a year-on-year increase of 1.2”. In the Chinese market, TV shipments fell by 13.2% in the whole year of 21 years. The market demand has changed from new demand to replacement demand. The terminal market maintains the basic price of 40m up and down every year. Orville rivo predicts that TV shipments in the Chinese market are expected to achieve positive growth in 2022, benefiting from multiple positive factors such as sports events and low price stimulation; Due to serious demand overdraft and insufficient growth momentum in developed countries in North America and Europe, TV demand is expected to continue to decline; Under the expectation of price reduction, TV demand in emerging markets is expected to recover, but it is still difficult to achieve growth. Based on the above factors, ovelvo expects global TV shipments to be – 2.6% year-on-year in 2022.
Quarter by quarter, Qunzhi consulting expects that the shipment of 22q2 Chinese market is expected to pick up under the promotion, and the overseas market will remain weak. The overall global TV shipment is – 2.5% year-on-year, with a slight increase month on month. In addition, the Russian Ukrainian war and rising inflation have had an impact on the demand for consumer electronic products, which is expected to result in a year-on-year decline of about 4.7 million TV shipments.
Upstream and downstream dynamic tracking: upstream, Samsung display has begun to develop OLED panels with double-layer stacking structure, in which the panel has two emission layers (EML). The double-layer series structure OLED panel can reduce the power consumption by 30%, double the brightness, and increase its service life by four times. It can be designed with smaller batteries and lighter appearance. We are optimistic that the penetration rate of OLED panels in tablets will continue to grow after the R & D breakthrough of double-layer stacked series structure. Downstream, vivo announced that it will release the flagship of vivo x fold folding screen, which will be officially released on April 11. Vivo x fold’s internal and external screens are equipped with Samsung E5 light-emitting OLED screen, with brightness up to 1300nit and support 120Hz high refresh rate. The internal screen also supports ltpo adaptive refresh technology. Combined with the independently developed internal and external screen color calibration scheme, the internal and external screens have higher consistency in brightness, fluency and color, reaching the world’s first 19 display mate performance records and obtaining the overall a + level certification. According to omdia, in 2021, the cumulative shipments of global folding screen smartphones reached 11.5 million units. In the future, the market will grow steadily year by year. It is expected to reach 14 million units in 22 years and 61 million units in 2026, accounting for 3.6% of the total smartphone market. We believe that with the gradual improvement of the product layout of mainstream manufacturers and the increasing demand for superimposed downstream folding screens, AMOLED for folding screens will accelerate its penetration in the future.
Tracking of key companies: the decline of TV panel price converged in March, with a month on month decline of 0-1.8%. The price of TV panel has reached its peak since July 21, with a downward trend. From July 2021 to March 2022, the decline was 40.1% – 59%, and the month on month decline was 0-1.8% in March 2022, which further converged. In the post epidemic era, demand returned to normal. At the same time, the shortage of parts and components was alleviated, the new production capacity climbed, and the supply and demand tended to be stable and still loose. It is expected that large-scale will drive the growth of demand area and the withdrawal of overseas production capacity in the future. In the short term, it is expected that after 22q2, the supply and demand will be gradually balanced by goods preparation in the peak season, and the prosperity is expected to rise; However, the outbreak of the conflict between Russia and Ukraine and other global political and economic environment turbulence and repeated outbreaks still show that the industrial chain increases uncertainty. China’s Chinese mainland’s factory production will continue to rise year by year, and China’s capacity will continue to concentrate on leading companies. In the long run, we believe that the market share of Chinese mainland manufacturers will further increase. In the medium and long term, the pattern of large-size panels will not change. In terms of small size, the commercialization of folding screen is expected to drive the trend of screen replacement and benefit the development of small-size flexible OLED products. We continue to be optimistic about the increase in the share of China’s panel leaders under the domestic substitution trend, firmly optimistic about the double leaders in the medium and long term, continue to suggest paying attention to BOE and Tcl Technology Group Corporation(000100) , and suggest bargain hunting layout.
Risk factors: conflict between Russia and Ukraine; The epidemic control was not as expected; Weak downstream demand; The exit of overseas production capacity is less than expected; Technological innovation risk, etc.
