Will the “high production” of domestic manufacturers cause the price of large-size LCD panels to plummet?

The prices of large-size panels continue to plummet, and the main reason may come from domestic manufacturers.

As downstream market demand weakens, LCD TV panel prices continue to decline, and the current 55-inch LCD TV panel price is close to the $100 mark. Research shows that the main reasons for the panel price plunge include the price war triggered by Chinese manufacturers, which has put increasing pressure on TV manufacturers.

BusinessKorea reported that market research firm IHS Markit released a survey report on Wednesday (25th) that in September this year, the average price of 55-inch LCD TV panels fell to US$102, a decrease of 6% from August, and has been declining for five consecutive months. Since the beginning of this year, it has fallen by US$43 (30.6%) and is facing the risk of falling below the US$100 mark.

Prices of LCD panels of other sizes also continued to fall. The average price of 65-inch LCD TV panels was US$167, a decrease of 4% from August, while the average price of 50-inch LCD TV panels also fell to US$84, a monthly decrease of 5%.

The IHS Markit report pointed out that the sharp drop in LCD TV panel prices was partly due to the price war launched by Chinese manufacturers such as BOE, China Star, CHOT and CEC-Panda, making the LCD panel market competition more intense.

IHS Markit predicts that in terms of shipments, Chinese companies will account for 50.2% of the global LCD TV panel market in the fourth quarter of this year, up 5.2 percentage points from 45.0% in the second quarter. In the first quarter of 2017, Chinese companies had a combined market share of about 30%, but in less than three years, their market share has increased by nearly 20 percentage points.

In addition, IHS Markit believes that the sales gap between QLED TVs and OLED TVs will further widen, and estimates that QLED TV sales this year will reach 5.45 million units, an 11% increase from the previous forecast of 4.9 million units. Among them, Samsung Electronics will be an important force in promoting QLED TV sales. It is expected that Samsung's QLED TV sales this year will exceed 5 million units, accounting for more than 90% of the total QLED TV sales.

In contrast, IHS Markit lowered its sales forecast for OLED TVs this year from 3.25 million units to 3 million units, a decrease of 8 percentage points.

According to Samsung's first-half 2019 financial report released on August 22, the company's capital expenditure on semiconductor and panel equipment fell sharply to 10.7 trillion won, the lowest in nearly three years, partly due to the weak memory chip market and increased uncertainty from global trade tensions.

Yonhap News Agency reported on August 21 that IHS Markit released statistics showing that based on sales, Samsung's market share in the global TV market reached 31.5% from April to June this year, a six-year high, nearly twice as much as the second place and surpassing its competitor LG Electronics' 16.5%. Japan's Sony ranked third with 8.8%, and China's TCL Group ranked fourth with a market share of 6.3%.