TV panel shipment projected to drop 7.1% YoY by end of second quarter
Details
Joseph O'Halloran
| 16 April 2020

More bad news for the TV set industry has come in the form of a study from specialist display technology researcher WitsView which is forecasting demand to be severely affected by the Covid-19 pandemic while capacity allocation issues exist.

The analyst noted that at the end of the fiscal quarter in March 2020, the near-resolution of TV panel material shortages induced manufacturers to step up proactively their shipments, in turn raising TV panel shipments in March to 23.371 million pieces, a 16.4% month-on-month increase compared with February.

The analyst calculated that TV panel shipments amounted to 64.253 million pieces in Q120 despite quarter-on-quarter (QoQ) and year-on-year (YoY) decreases of 12.0% and 8.2%, respectively. First quarter shipments exceeded market expectations, and fell short of the shipment target set by manufacturers at the start of 2020 by only 4.9%, signalling said the analyst an end of Covid-19’s impact on panel suppliers.

The research predicted that in Q220, factors influencing the TV panel industry will shift towards the demand side in the TV market. Firstly, Europe, the US, and several emerging Asian markets have announced citywide and nationwide quarantines and lockdowns, actions expected to cause declining sales in the consumer electronics market. In spite of the seeming QoQ growth in Q220 TV panel shipment compared with a relatively weak first quarter base period, the magnitude of this growth was projected to reach just 2.3% due to panel purchasers’ increasingly conservative procurement efforts.

In total, total Q220 TV panel shipments are estimated to total 65.75 million pieces, a 7.1% decrease YoY, reflecting a shortfall in panel demand.

As TV demand tumbles, WitsView says that its research noticed that panel suppliers and purchasers alike have begun to generate rumours of lowered panel manufacturer capacity utilisation rates. The analyst holds the opinion that lowering capacity utilisation is not the best course of action at the present, for three reasons.

First, quotes for most sizes of TV panels are currently higher than cash costs, following a general uptrend in quotes since the start of the year. Lowering capacity utilization at the moment thus goes against the principle of profit maximisation. Second, the rising demand for telework arrangements has galvanised a corresponding short-term hike in IT panel demand. Therefore, some panel manufacturers may still maintain their level of capacity utilisation through adjusting their product mix to meet this demand. Third, Korean panel manufacturers have announced plans to shut down their LCD production lines in Q420. This shutdown is expected to result in a reshuffle in both the supply chain and the market shares of panel manufacturers.