Displays
Panel makers likely to adjust large-size TV panel production to stem losses
Rebecca Kuo, Tainan; Steve Shen, DIGITIMES
Tuesday 17 April 2018

LCD panel makers are likely to adjust their capacities for TV panels, particularly for 43-, 49/50- and 65-inch sizes, to cope with unfavorable market conditions caused by falling panel prices, according to industry sources.

TV panel prices have continued to fall in April after the industry saw the prices of medium- and large-size TV panels slid 7-10% and over 10%, respectively, in the first quarter of 2018, said the sources, adding that April quotes for 43-, 49/50- 65-inch panels have fallen to almost the production cost levels.

For example, quotes for 65-inch TV panels stand at US$280 per unit in April, down US$10 from a month earlier. Some panel makers are expected to incur losses on the 65-inch panel shipments as a unit price of US$280 is close to their production costs, said the sources.

Slackened sales of large-size TVs in China and North America in the first quarter of 2018 and significant ramp-ups of 65-inch panels by Korea's and Taiwan's panel makers contributed to steep price declines of 65-inch panels, indicated the sources.

Global shipments of 65-inch TV panels reach about one million units a month currently, with Samsung Display, LG Display, AU Optronics (AUO) and Innolux as the major players.

These major players are expected to adjust their production capacities for 65-inch panels as sales of this size segment are likely to incur losses, said the sources, noting that prices of 65-inch panels are expected to stop falling at the end of the second quarter due to reduced output as well as decreased inventories at channels.

Quotes for 49/50-inch TV panels stand at US$126-127 in April compared to their production costs of US$125-130. Samsung Display and LG Display are major suppliers of 49-inch panels, and BOE Technology and China Star Optoelectronics Technology (CSOT) are also shipping 49-inch panels in smaller volumes. Meanwhile, AUO and Innolux are the main producers of 50-inch panels.

Prices of 43-inch FHD TV panels are currently set at US$93 and are expected to dip further in May to the edge that some panel makers will begin to incur losses from this size segment, commented the sources.

However, the sources pointed out that production of 23.6-, 32- and 55-inch TV panels are still profitable currently. For instance, quotes for 55-inch panels reach US$169 in April compared to an average production cost of US$155-160, allowing makers to generate profits. Samsung Display, LG Display and CSOT are the major suppliers of 55-inch panels.

Flat panel makers are facing increasing pressure on falling panel prices Photo: Michael Lee, Digitimes, April 2018

Flat panel makers face increasing pressure on falling prices
Photo: Michael Lee, Digitimes, April 2018

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