After an unexpectedly strong first quarter driven by front-loaded demand, the global LCD panel industry is now showing signs of cooling. The momentum, boosted by US tariff exemptions and China's "trade-in" subsidies for home electronics, is fading fast as those tailwinds weaken heading into the second half of 2025.
Panel makers had benefited early this year from clients rushing to stock up ahead of anticipated policy changes. Yet as the second quarter draws to a close, caution is returning. The expiration of US tariff waivers and diminishing effects of China's subsidies — especially after the mid-year 618 shopping festival — have caused panel orders to soften. LCD TV panel prices, which had been climbing, have begun to slip slightly.
All eyes on US tariff decision
The third quarter traditionally marks a seasonal high for panel shipments. But the first half's pull-forward demand now casts doubt on the strength of the remainder of the year. Industry observers say the outcome of ongoing US trade negotiations will be pivotal, especially with tariff exemptions due to expire soon.
Meanwhile, geopolitical and macroeconomic uncertainties persist. Although US President Donald Trump has claimed that the Israel-Iran conflict has ended with a ceasefire, the long-term stability of the region remains uncertain. Even more pressing is the currency market: Taiwan is among a dozen countries cited in the US Department of the Treasury's currency report for potential "manipulation," making the trajectory of the Taiwan dollar — already up over 12% against the US dollar since April — a major variable for exporters.
TV brands rethink procurement under mounting inventory
Facing murky demand and elevated inventory levels, several global TV brands are reportedly considering reducing panel orders for the third quarter. Some are also leveraging the weakened outlook as a bargaining chip in price negotiations with suppliers. Demand for LCD monitor panels, which had peaked earlier in the year, is also receding, with prices stagnating as a result.
Notebook panel demand holding up
The outlook for NB panel shipments remains more resilient, but not without risks. Acer raised prices on its notebooks by 10% in March, and other brands may follow in the third quarter, potentially dampening demand. The combination of currency fluctuations, ongoing US-China tariff uncertainty, and challenges in relocating supply chains away from China could weigh on overall NB panel sales.
Still, there are bright spots: Japan's education market is shifting to a three-year replacement cycle for Chromebooks, down from four years — a move expected to spur demand for entry-level notebooks and, in turn, panel orders.
Panel shipments see yearly decline in Q3
Industry analysts now forecast a year-over-year decline in shipments for large-sized LCD panels — including TVs, monitors, and notebooks — in the third quarter of 2025, echoing the "peak season that isn't" narrative of 2024. While the contraction in the third quarter may be modest, there are growing concerns about the fourth quarter, especially if macroeconomic headwinds persist.
In response, Chinese and Taiwanese panel makers have already begun dialing back utilization rates, with high-generation fabs currently operating at around 75% to 80% capacity. Further output cuts in July or August are on the table if demand remains weak.
Controlled production becomes the new normal
Production control has become a routine strategy for panel makers navigating a persistently oversupplied market. While it may limit short-term volume, it helps prevent drastic price collapses and fosters healthier industry dynamics.
In a sector long haunted by boom-and-bust cycles, the ability to stabilize prices — even in the face of geopolitical uncertainty and shifting trade winds — may prove to be one of the industry's most valuable assets heading into the latter half of the year.
Article translated by Elaine Chen and edited by Jack Wu
