Supply-Demand Balance in TV Panel Market Poised to Increase in 2018

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LCD panel market is expecting several new large generation fabs in 2018. BOE has launched the world’s first Gen 10.5 fab, while CEC-CHOT’s Gen 8.6 fab and Gen 8.6+ fab of CEC-Panda Chengdu will also go into operation this year. WitsView, a division of TrendForce, says that there was a 20-40% downward correction in TV panel prices during 2017. While the price decline in the TV panel market will be easing in this year's first half, this first quarter will still see the price trend on a gradual downward slope.

Falling panel prices will spur promotions in the end product market. Therefore, stock-up demand from TV brands will be warmer in this year’s second half compared with the second half of 2017. The supply and demand of TV panels are also expected to reach a more balanced state. Our latest analysis indicates that the risk of serious oversupply in the TV panel market will most likely to happen later in 2019.

Anita Wang, senior research manager of WitsView, points out that the new fab will have limited input in early stages, and will need time to improve field rate and production capacity. Therefore, Wang estimates that they will only contribute to 3% of the global glass input for large-size LCD panels. And the figure is expected to raise to 6-8% in 2019.

Going into operation on December 20th, 2017, BOE’s Gen 10.5 fab in Hefei is expected to enter mass production in March 2018. The major products will be large-size TV panels of 65" UHD 60Hz and 75" UHD 60Hz, intensifying the competition in large-size (65" or greater) TV panel market.

In the production of 65" TV panels, for instance, current Gen 6 fab cuts per glass substrate into 2 panels, while Gen 8.5 fab cuts into 3. In Gen 10.5 fab, however, the number rises to 8, increasing the productivity of 65" TV panels significantly.

WitsView forecasts that BOE’s Gen 10.5 fab will target at more than 2 million pieces for the production of 65" panels, but whether this goal can be achieved still depends on the improvement in yield rate. The Gen 10.5 fab will not have large-scale influences on the overall supply in the industry this year, but BOE will impact the market in 2019 with its shipments expected to reach 3 to 4 million pieces. In 2020, BOE is even predicted to surpass panel makers in South Korea and record the highest shipments for 65" panels, with its market share reaching around 37%. In comparison, the market share of Taiwanese panel makers for 65" panels will drop to 18% in 2020 without any capacity expansion.


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