The LCD TV panel market is depressed. Are LCD panels really doomed?

The LCD TV panel market is depressed, and major panel manufacturers have reduced production. This situation may continue until 2020.

TV panel prices have plummeted. Not only have panel manufacturers reduced production to adjust inventory, but Korean panel manufacturers have also turned to OLED and abandoned the LCD panel market. Korean panel manufacturers' 2020 TV panel shipment forecasts have been released. LGD and Samsung Display's LCD TV panel shipments have both dropped by 20% compared to this year. Taiwan's panel factory shipment forecasts are also similar to this year. In 2020, the growth rate of LCD TV panel production capacity will be significantly reduced.

TV panel prices continue to hit rock bottom, with 32-inch, 55-inch, and 65-inch panels all falling below cash costs, with 32-inch panel prices dropping to $33, almost reaching $1 per inch. On the other hand, OLED panels, because there are still certain technical barriers and Korean panel manufacturers have the advantage of being a leader, have relatively stable prices. A 6-inch flexible OLED panel costs $60 to $80, twice as much as a 32-inch panel.

Samsung Display has strategically abandoned its IT panel business. In addition, OLED panels are expensive and its global OLED panel market share exceeds 70%. 70% of its revenue this year comes from OLED panels, which means it is already an OLED panel company. LGD's OLED panel plant in Guangzhou will start production at the end of this year, and it will also focus on the OLED panel business in the future.

With OLED panels as a backing, Korean panel manufacturers will gradually withdraw from the LCD panel market and plan to shut down half of the LCD panel production lines in Korea in 2020. According to the latest panel factory shipment forecast, LGD's LCD TV panel shipment target in 2020 is about 30 million pieces, a decrease of 18.92% compared to 37 million pieces this year. Samsung's LCD TV panel shipment target has been cut to 25 million pieces, a decrease of more than 20% compared to 32 million pieces this year.

Taiwan's panel manufacturers have not added new production capacity, and their 2020 shipment targets are the same as this year. Innolux maintains at 41 million to 42 million pieces, while AUO is at 22 million to 24 million pieces.

It is worth noting that although BOE's second 10.5-generation plant will be put into production in 2020, even mainland panel factories can't stand the cold winter of panel economy this year. BOE's 10.5-generation plant has reduced production by more than 20%, and the production speed of Huaxing Optoelectronics' 11-generation plant has also slowed down. In addition to the unpaid leave and disguised production reduction of HKC's Chongqing plant, the latest Chuzhou plant has only 60,000 pieces of production, and the utilization rate is less than 60%. Previously, market research agencies estimated that the growth rate of large-size panel production capacity in 2020 would reach 9%. Now the production speed of new plants of mainland panel factories has slowed down, and Korean panel factories will gradually close old plants and accelerate the transition to the OLED panel market. In 2020, the actual production capacity growth rate of LCD panels may converge significantly, and the market supply and demand situation is expected to improve.