Analysis and summary of global LCD TV panel industry in the first half of 2019

Global economic growth in 2019 is not as expected, and regional political and economic frictions have brought more uncertainty to the global economic situation. At the same time, China's economic growth slowed down, consumer purchasing power declined, terminal sales fell, and panel demand was weak. The panel production capacity has maintained a high-speed growth, the supply and demand are seriously unbalanced, the panel price has accelerated to fall, and the operation and profit of manufacturers are facing severe challenges. The global TV panel industry is facing unprecedented difficulties.

TV panel production area increased by 12.2% year on year
Panel manufacturers, especially Chinese manufacturers, are still enthusiastic about investment in high generation panel lines. In 2019, three high generation LCD production lines have been experiencing a ramp up in mass production. In addition, in 2018, the mass production lines have reached full production in succession, driving the global LCD TV panel production area to maintain a high-speed growth trend. Among them, BOE's first g10.5 generation line and CEC panda's Chengdu g8.6 generation line achieved full production in the first quarter, while csot's g10.5 generation line and HKC's Chuzhou's g8.6 generation line started to ramp up production in half a year. According to the statistics of sigmaintell, in the first half of 2019, the global LCD TV panel production area increased by 12.2% year-on-year, and it is expected to increase by 8.8% year-on-year in 2019.

Increase in shipment scale and decrease in 55 "market share

According to sigmaintell, in the first half of 2019, the global LCD TV panel shipment scale was 140 million pieces, an increase of 3.6% year on year; the shipment area reached 77.34 million square meters, an increase of 10.4% year on year. In the case of weak demand, in the face of production capacity pressure, panel manufacturers actively seek shipment growth, driving the overall shipment growth in the first half of the year. However, the growth rate of shipment is lower than that of panel production capacity, and the industry inventory is gradually rising. By the end of June 2019, the overall inventory of panel factory has exceeded two weeks, and the inventory level is on the high side. At the same time, as the terminal sales are not as expected, the inventory of channels and brands is higher, and the power of panel shipment in the third quarter is weakened.

From the perspective of size structure, the proportion of 32 "is still high in the first half of the year; the overall share of 39" ~ 43 "is stable, of which 40" decreases and 43 "increases. With the increase of g10.5 supply, the market share of 43" is expected to grow significantly; the market share of 49 "in the middle size segment shrinks rapidly and 50" tends to stabilize; the price of 65 "is greatly reduced, the market share is increased, and the market share of 55" appears. Down, 55 "market share fell 1.3% month on month in the second quarter.

The global share of Chinese manufacturers is nearly 50%, and the scale advantage is prominent

According to panel manufacturers, driven by the continuous growth of production capacity, the proportion of Chinese panel manufacturers in the global LCD TV panel market is increasing. According to the data of sigmaintell, in the first half of 2019, the number of panel manufacturers in mainland China accounted for 45.8% of the global total, accounting for nearly half of the total, showing the scale advantage. In terms of the ranking of the shipment quantity in the first half of 2019, BOE, LGD and Qun Chuang photoelectric ranked in the top three respectively, csot ranked in the top five, ranked fourth, and Samsung (SDC) ranked fifth.

BOE's shipment volume reached 27.6 million in the first half of 2019, ranking the first in the world, but its shipment acreage is second to LGD's by a small margin. BOE's overall shipment growth is stable, G10.5 has the first mover advantage and actively develops high-end market. However, due to the weak demand for 65 "and 75" panels in the second quarter, the growth of its shipment area shows a gradual slowdown.

LGD's LCD TV panel shipments reached 22.65 million, down 4.5% year-on-year, ranking second. In the context of weak overall demand in the second quarter, LGD strengthened its cooperation with strategic customers, ranking first in terms of shipping acreage over BOE.

Qun Chuang benefits from differentiated product strategy, stable delivery and operation. In the first half of the year, the total number of shipments reached 21.92 million, up 5.6% year on year, ranking third in the world in terms of quantity and fourth in terms of acreage.

Samsung (SDC) focuses on high-end large-scale products, but due to the weak demand of overseas brands and Chinese customers, the number of shipments in the first half of 2019 decreased by 10.6% year-on-year, and the inventory pressure increased sharply. Samsung (SDC) strategically withdrew from the large-scale LCD field. In the second half of the year, it will shut down part of G8.5 production capacity and lay out QD OLED new technology, seeking technological innovation to break through in the increasingly difficult operation environment.

Csot is ranked in the top five, and the production of G10.5 line is climbing. The supply of large-scale products above 55 "will increase significantly. However, due to excessive dependence on TCL brand, the growing capacity has also become a severe test.

Youda adheres to the strategy of key customers, and its production and delivery are relatively stable.

Other panel manufacturers, Huike Chuzhou's 8.6 generation production line began to ramp up in mass production; CEC panda's shipments to international brands grew steadily; rainbow Optoelectronics (CHOT) maintained full production based on cooperation with group customers and Chinese brands; Sharp's G10 production capacity in the first quarter was slightly restored in the second quarter, but it was still at a low level, and the overall shipments declined significantly. 

Global LCD TV panel shipments in the first half of 2019 (unit: million sets)
Double bottom price and unprecedented profit pressure of panel factory

The contradiction between the lack of driving force for demand growth and the growing panel capacity is becoming increasingly fierce. The supply and demand of the global LCD TV panel market is seriously unbalanced, and the price of TV panel continues to bottom out after the decline in 2018. Although the price of small-sized panel rebounded in a short period at the end of the first quarter, it lasted only from January to February. In the second quarter, the price adjusted downward again, out of the double bottom market. In particular, in the middle and late second quarter, under the influence of adverse factors such as the escalation of trade friction between China and the United States and the year-on-year decline of the domestic "6.18" market, the decline of panel price has expanded, and many panel prices of different sizes are close to the cash cost, which makes panel manufacturers bear huge pressure of loss.

32 ", led by the panel factory strategy, it rebounded slightly from March to April, but the demand power was insufficient, the market supply and demand were surplus, and the panel price hit the bottom again, falling below $40. In the first half of the year, the 32" panel price dropped 10% from the bottom price of last year.

In the 39.5 "~ 43" size segment, the terminal demand is relatively strong, the panel capacity supply growth is limited, and the price is relatively stable. In the first half of the year, the cumulative decrease of 43 "FHD was less than 5%, further widening the price difference with 40" and 32 ". With the supply of 43 "in the second half of the year, the downward pressure on prices has greatly increased.

In terms of 49 "~ 50", the production capacity of 49 "contracted rapidly, and the supply capacity of 50" tended to be stable, with the price drop of less than 10% in the first half of the year.

55 ", the panel demand is weak, and the price drops sharply. In the first half of the year, the cumulative decline reached 17%, and the price quickly approached the cash cost.

65 ", g10.5 capacity release, 65" and 75 "supply capacity greatly improved. Although the brand has greatly expanded its market share of 65 "in the terminal market, the growth rate of demand is far less than that of panel production capacity, and the supply and demand are seriously unbalanced. In the second quarter, the price of 65" panel increased by an overall decrease of 14% in the first half of this year.

Price drop of LCD TV panel mainstream size in the first half of 2019 (unit:%)

Industry may speed up reshuffle

With the price of the main size panel falling below the cash cost, the panel factory is under great operating pressure. Since the first quarter of 2019, the main businesses of panel manufacturers have all suffered losses. In the next two years, there are still a lot of new production capacity, and the supply area will keep increasing. On the other hand, the demand is facing the saturation of market capacity and the decline of consumer purchasing power. Sigmaintell predicts that the gap between supply and demand will continue to expand when panel manufacturers do not control production capacity, and the panel market may face the risk of persistent oversupply for a long time. The industry may speed up the reshuffle, the survival of the fittest will be inevitable.

At this time, panel manufacturers should be prepared for a long-term war. On the one hand, they should actively reduce costs, optimize the internal structure, increase the cost competitiveness, and at the same time, they should constantly promote product technology innovation and explore application innovation. In the short term, under the unstable global market environment and continuous loss, we suggest that panel manufacturers should carefully consider the reasonable control of production capacity and reduce supply, which is the most effective way to promote the balance of supply and demand.