Over-inventory makes TV panels prices dive, says TrendForce: Page 2 of 3

July 05, 2019 //By Julien Happich
TV panel
According to TrendForce’s WitsView market research division the cumulative effects of the US-China trade dispute and Samsung Display's original decision to shut down its Gen 8.5 L8-1-1 plant lured brands to preemptively increase their inventory levels in 2Q, causing TV panel prices to plunge as a consequence of over-inventory.

32-inch panels suffer the most

32-inch panel prices have dropped by over US$4 in one fell swoop under the weak demand and climbing inventory levels of June, arriving at US$36.

From a supply side point of view, TrendForce sees BOE trying to lower 32-inch production in order to alleviate the downward pressure on prices. Meanwhile, Innolux's 58-inch products from its Gen 5.5 line were no match for CEC Group's low-pricing strategy, causing the company to suffer an outflux of orders and turn to 32 -inch products for help.

Meanwhile, the market research firm sees Korean manufacturers endlessly cranking out 65-inch panels, which are produced in pairs with 32-inch panels, in a bid to maintain their 65-inch panel market share. 32-inch panels will be in oversupply for July, and panel prices may crash below cash costs, putting panel manufacturers' cost-saving abilities to the test.


65-inch and 75-inch winning over 55-inch panels

Due to a drastic fall in prices for 65-inch TV sets, the TV size of choice hung in the living rooms of North American families have moved up from 55 inches to 65 inches, causing demand for 55-inch products to stagnate. Although SDC will be closing 1.5 of its Gen 8.5 lines, other panel manufacturers with Gen 8.5 lines will be increasing the ratio of production for 55-inch panels, bringing supply for such panels up by 3-4% YoY. Panel prices will most likely fall.

Due to brands having stocked up beforehand in June in anticipation of SDC's plant shut-down and the low demand at the end, their panel inventories have been piling up. Meanwhile, panel manufacturers are under pressure to get rid of their inventories by the end of the first half-year, causing prices to sink by over US$10 in June with ASP arriving at US$116 for the first time. If demand remains unoptimistic in July, there will still be some risk of price decline.

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