LCD panel prices continue to fall, BOE, CSOT, and HKC all reduce production

As liquid crystal display (LCD) panel prices continue to fall, Chinese LCD producers are starting to cut production to mitigate the economic downturn, BusinessKorea reported.

China's BOE, which ranks first in the world in terms of LCD shipments this year with a market share of 18.2%, has decided to cut production. The company has begun to reduce the output of its 10.5-generation LCD production line by 25% from July, and the output of other LCD production lines by 10%. Huaxing Optoelectronics and HKC have also reduced the operating rates of their 8.5-generation LCD products by 10% and 20%, respectively.

In addition to the price drop, the Chinese government has also reduced its support for panel manufacturers. Chinese display companies have been increasing LCD production through subsidies from local governments. However, recently the Chinese government decided to change its support measures because the share of Chinese companies in the LCD market will exceed 50%, and the expansion competition of Chinese companies has become fierce.

Therefore, Korean market experts said that Chinese display manufacturers are very likely to abandon excessive competition for factory expansion and further ease the oversupply situation. China's share of the global LCD market is expected to increase from 29% in 2016 to 54% in 2020.

Data from global market research firm IHS Markit showed that as of August, prices for 32-inch and 55-inch LCD TV panels were $33 (39,300 won) and $106 (126,340 won), down 20 percent and 26 percent from the beginning of the year, respectively.