In 2020, the TV panel supply pattern has undergone tremendous changes, resulting in tight supply and demand and a sharp increase in prices. In 2021, due to the shortage of upstream materials such as display driver ICs, glass and polarizers, and the power outage of NEG, the shortage of panels in the panel supply chain will be aggravated. According to industry insiders, in the context of the shortage of upstream materials, TV panel prices will maintain an upward trend in the first quarter.

However, as Samsung Display and LGD plan to delay the closure of LCD factories, the trend of continued rise in TV panels may be reversed. Some manufacturers worry that as China's panel makers increase their production capacity and the effect of Korean factories' postponement of plant closures, TV panel supply may once again be oversupply in the second half of the year, and panel prices will also decline with market changes.

Upstream materials are still in short supply, and panel prices continue to rise

In 2020, affected by the epidemic, the demand for remote office work and online education around the world will increase, which will drive the market demand for tablets, laptops and other products to grow, and the demand for display driver ICs will continue to increase. In addition, since the third quarter, TV panel market demand has rebounded, resulting in a tight supply of the display driver IC market.

So far, the shortage of components has been affecting China's second-tier and third-tier panel manufacturers, and will affect first-tier panel manufacturers from the end of 2020. Omdia believes that this situation will continue to exist in the first quarter of 2021, and the shortage of components will be a factor limiting LCD TV panel shipments in 2021.

In addition to the shortage of ICs, on December 11, 2020, NEG’s glass substrate plant in Takatsuki, Japan experienced a temporary power outage. The power outage caused damage to about 5 feeders into which glass raw materials were put in and caused shutdowns, which affected production capacity. Increase the tension in the supply chain.

According to Qunzhi Consulting’s calculations, the NEG power outage had an impact on the global supply of large-size LCD panels in December by 2.9%, equivalent to a loss of 120K of G8.5 generation capacity; the impact on the production capacity supply in the first quarter of 2021 was 2.5%, equivalent The production capacity of the G8.5 generation lost 95K. There will be varying degrees of impact on different panel makers, and the specific impact depends on the operation capabilities of each panel fab's supply chain.

Regardless of the impact of this event, the global supply-demand ratio of large-size LCD panels (IT+TV) in the first quarter of 2021 is already in a tight situation (TV panel supply-demand ratio is 4.1%); after considering the impact of this event, the supply-demand ratio will narrow. It is expected that the global supply of large-size LCD panels will be significantly tight in the first quarter of 2021.

Due to the continued tightening of upstream display driver ICs and the NEG power outage that impacted the supply of glass substrates, which restrained the actual effective supply of some panel makers, the global LCD TV panel market continued to be in short supply, and panel prices continued to rise.

According to Qunzhi Consulting’s forecast data, global LCD TV panel prices will maintain an upward trend in January 2021. The increase has narrowed compared to the previous period, but the increase is still large. In terms of size performance, the price of 32-inch TV panels will maintain an increase of 2-3 US dollars in January. The mainstream 39.5-43 inches will also maintain an upward trend. The 50-inch supply will continue to be tight. The increase in January will reach 4 US dollars. , The increase is even more significant, the estimated increase is expected to be 5-6 US dollars.

AUO Chairman Peng Shuanglang emphasized that prices will always be determined by supply and demand, and the severe situation will continue into the first half of next year. And CINNO Research also told Jiwei. “Due to the second outbreak of overseas epidemics, many countries have re-intensified epidemic prevention efforts. The impact of home demand continues to play a role. In the first half of this year, the demand for TV panels has no signs of weakening. With the supply of key upstream materials, panel prices will continue to rise."

Delayed closure of the Korean factory may cause the situation to reverse

As TV panels are in short supply and prices have risen sharply, Korean panel makers’ plans to close factories have been postponed. Following LGD’s one-year extension of its production plan, Samsung Display’s timeline for shutting down the LCD production line will be from the end of 2020 to March 2021, and now it has been postponed indefinitely. The closure timeline will depend on market conditions. .

A manufacturer said, “Due to the continued price increase, Samsung’s complete machine factory is in short supply, so Samsung Display has delayed closing the factory; if the price stops rising or even starts to fall, Samsung Display may continue to close the factory.”

Although Samsung Display’s delay in closing its LCD factory was mainly based on the needs of Samsung Electronics’ TV manufacturers, and did not sell TV panels to other terminal brands, Samsung Electronics will inevitably reduce the demand for other panel manufacturers after purchasing Samsung Display’s TV panels. The purchase volume will affect the TV panel supply market.

TrendForce analyst Chen Qiaohui pointed out that the delayed closure of Samsung Display’s LCD factory will not have a significant impact on panel supply and demand in the first quarter of 2021. The main reason is that it was originally planned to supply nearly 1.8 million TV panels and 1.1 million in the first quarter of 2021. The display panels are supplied to the group's brands, and related parts are currently out of stock. Shipments are expected to be reduced to 1.5 million and 550,000 respectively, and the gap will not be made up until April 2021.

According to TrendForce’s supply and demand model, although Samsung’s delayed closure of the factory will increase the area invested in the second quarter of 2021 by 2.2%, there is still a risk of material shortages in the second quarter. In addition, the demand for panels for TVs, monitors, and notebooks remains There is certain support, so it is estimated that the overall supply and demand situation in the second quarter can still maintain a balance.

On the whole, although Samsung Display stated that all panels produced in 2021 will be sold to group brands, TrendForce predicts that the panel market will experience oversupply from late next year. Increasing supply of Samsung Display will undoubtedly expand the risk of supply-demand imbalance. Samsung Electronics (SEC) has always been the largest purchaser of panels. As the support of the group's panel factories increases, how the procurement strategy will change will be one of the key observation items in 2021.

Xie Qinyi, senior research director of Omdia’s display department, said, “SDC is mainly supplied to Samsung’s own LCD TVs, and has little impact on Taiwanese manufacturers’ shipments, but the mainland manufacturer’s BOE, TCL Huaxing, etc. will be affected.” Some manufacturers are worried. With the increase in production capacity of Chinese LCD factories and the delayed closure of Korean factories, there may be an oversupply of TV panels in the second half of this year.

In addition to the supply side, the demand side has become increasingly concerned. Peng Shuanglang said frankly that he has no special expectations for whether this year's Olympics in Japan will bring about a wave of large-size TV purchases. In recent years, sports events have driven big TV purchases not as hot as in the past. For example, the promotion of Black Friday in 2020 has also reduced a lot. The main reason is that the panel is out of stock and there is no incentive to reduce prices.

Industry insiders bluntly said, "TV demand will be strong in the second half of 2020, but only in some developed regions. It is unrealistic to expect a rapid recovery in other regions. At present, the overall market demand has not increased significantly. Manufacturers need to be wary of the oversupply of TV panels. There will be a sharp decline."

Overall, 2021 is still a challenging year for panel manufacturers. Manufacturers need to adjust their business strategies in a timely and accurate manner based on changes in market conditions. At the same time, deepen the cooperation with the upstream supply chain to ensure the safety of the supply of important raw materials, parts and main equipment, and through the formation of strategic alliances with high-quality customers, implement the key account strategy, and continue to explore partners with channel resources.