Sharp demand drop by Chinese TV makers hits LCD TV panel market



| 13 October 2015

Leading Chinese TV makers are trimming panel buying in response to TV panel oversupply and falling prices, says research firm IHS.

Indeed the analyst calculates that likes of Hisense, TCL, Skyworth, Haier, Changhong and Konka are set to report a 16% fall in panel purchasing during the fourth quarter of 2015, buying just 14.8 million LCD TV panels, including open cell and modules.

In the first half of 2015, panel makers shipped 29.4 million TV panels to Chinese manufacturers, leading to 15% year-over-year growth. However, IHS observed that in the third quarter, Chinese TV makers drastically reduced planned panel purchases, shipping 15 million TV panels to China in Q3 2015, a 6% year-over-year decline. By the end of the year, the top six leading TV makers are set to buy 59.3 million panels, a year-over-year decline of less than 1% compared with 2014.

The knock on effect, IHS adds in its TV Display Supply Chain Tracker - China from IHS Technology report, will be that panel manufacturers who have invested heavily invested in the Chinese market namely, LG Display, Samsung Display, BOE, ChinaStar, AUO and Innolux will likely adjust their capacity utilisation further still.

"China is the largest global TV market, and this panel inventory adjustment and stagnant sell-through have caused TV makers in China to become more conservative in their panel purchases," explained IHS senior display analyst Nick Jiang. "This conservatism is a major shift from the aggressive market in 2014, which has caused display makers to face oversupply and may induce panel prices to drop further at the end of this year ... panel makers must now adjust their capacity and production strategy, which will make the market down-turn more severe by year's end."