According to the historical economic cycle, IT panel (display panel and NB panel) will have a correction after the shipment is too high and a rebound after bottoming out. For example, in 2008, IT panel shipment corrected by 30% to 40% from the peak, and bottomed out after declining for 2 to 3 quarters in a row. In 2015, the shipment of IT panel was revised by 18%~28% from the peak, and rebounded after a decline of 5~6 quarters.



TrendForce analyst Chen Junxian pointed out that by the first quarter of 2023, display panel (MNT) has fallen for five consecutive quarters, the relative peak shipment has been corrected more than 30 percent, as the end market demand to warm up, panel market recovery, demand will be greater than the set demand. In the case of NB panels, shipments also fell for five consecutive quarters and have been revised by nearly 50 percent. However, due to higher accumulated inventories of NB panels in the past and lower-than-expected end-market demand, the correction period for NB panels will continue until the second quarter of this year.



Although the current production capacity of display panels and NB panels is sufficient, the oversupply of panels will not occur this year due to the risk of possible shortage caused by the insufficient supply of upstream IC materials. However, the risk of oversupply or overcapacity may resurface in the off-season in the first half of next year, and the overall layout must be reconsidered.

01

NB Panel: Shipments will return to growth in 2Q2023

Shipments of 16:10 NB panels fell for two consecutive quarters in the fourth quarter of last year and the first quarter of this year on the back of lower orders. Shipments of 16:10NB panels will return to growth in the second quarter of this year as Apple stocks components for new models and other non-Apple brands increase purchases of 16:10 panels.



In addition, the shipment of high frame rate NB panels is still growing at the rate of millions of pieces per year. However, with the development of high frame rate NB panels for many years, the market share and shipment increase year by year, and the shipment growth starts to slow down. However, relatively speaking, the market rate distribution of each panel manufacturer is more uniform. And each NB panel manufacturers are in the overall layout of high frame rate products.

Figure 1. Shipments of high frame rate NB panel

02

Display panel: Esports shipments expected to grow 9% in 2023

Shipments of high frame rate MNT panels declined in 2022, but are expected to rebound this year, with all panel manufacturers deploying 100Hz models in 2023. Upgrading gaming panels from 144Hz to 165Hz is also one of the focus of display panels this year.



In 2022, the esports display market was hit by high inflation, and most brands actively promoted their game products on a large scale. The shipments of esports displays declined for the first time since 2016, reaching only 19.8 million units, an annual decrease of 13%. TrendForce expects the esports display market to return to growth in 2023, with shipments of about 21.6 million units, an annual increase of 9 percent. TrendForce senior research manager Wang Jingyi pointed out that there are three main factors driving the growth of esports display. First, some brands use 100Hz machines to replace the original 75Hz esports products; Secondly, the Asian Games in Hangzhou will be held in the third quarter of 2023. The esports event is also one of the competition items, which will help increase the demand for esports products. Third, after the epidemic, with China unsealing, the demand for Internet cafes gradually recovered.

Figure 2. Shipments of esports monitors from 2021 to 2023 (Unit: million units)

From the perspective of the type of esports panel, the market share of the esports display is still 51% with VA liquid crystal products in 2022; IPS liquid crystal products followed, accounting for 43.4% of the market, and TN liquid crystal products accounted for only about 5% of the market. It is worth noting that OLED esports products began to emerge in 2022, with a market share of 0.6%. With the gradual diversification of OLED products, OLED products market share is expected to rise to 1.6% in 2023. In addition, it is estimated that the market share of IPS esports display will reach 48% in 2023, which has a chance to compete with VA esports products, mainly due to the increasing market share of IPS products, coupled with the continuous price reduction of most IPS esports panels.

FIG. 3 Market share of esports display panel types from 2021 to 2023

In terms of the refresh rate of esports products, the market share of 165-180Hz is 51.9% in 2022, followed by 32.5% in 120-160Hz, and the market share of products above 200Hz is about 11.7%, while that of 100Hz is only 3.9%. TrendForce estimates that in 2023, 165~180Hz and 100Hz products will increase significantly in market share, among which, because the price difference between 165~180Hz and 120~160Hz products is not much, 120~160Hz market share will continue to be eroded by 165~180Hz. The 100Hz market is mainly to replace the 75Hz esports market, so the market share is likely to increase by 5.1 percentage points to 9.0% in 2023. In addition, in 2023, in addition to the new development of 100Hz products for esports monitors, some brands will also apply 100Hz products to business machines or even non-esports consumer machines.

Figure 4. Market share of e-sports product refresh rate from 2021 to 2023

03

TV panel: 4.7% on-year shipment in 2023

In 2023, the global political and economic environment is still Mired in the shadow of the Russia-Ukraine war and high inflation, and the weak economy will have an impact on TV sales, which are only supported by the consumer market. TrendForce estimates that global TV panel shipments will decline 4.7 percent annually to 259 million units in 2023, as panel makers aggressively raise prices and try to control production. Among them, LCD TV panel market mature and large supply, LCD TV panel shipment is estimated to reach 252 million pieces in 2023, a decline of 4.4% compared to last year; OLED will ship 6.5 million units in 2023, down 15.6 percent year on year.

Figure 5. Forecast of global TV panel shipments from 2021 to 2023

Chen Qiahui, research manager at TrendForce, pointed out that the obvious slowdown in panel demand after the outbreak and the continuous release of new capacity have led to the imbalance between supply and demand in the panel market. To solve the dilemma, panel manufacturers have reduced the production line operation rate to below 70% since the second half of 2022, in order to effectively reduce inventory. TrendForce said that with the recent recovery of TV panel demand, coupled with an increase in TV prices, it is estimated that the second quarter of Gen5 (including) LCD production line (in terms of square footage) is expected to rebound to 77%, because the current recovery of panel manufacturers from the actual order demand, the LCD market supply and demand ratio in the second quarter under the recovery rate, It should remain at a healthy level. In the second half of the year, panel manufacturers need to maintain prudent control and rapid response strategies to maintain the balance of the panel market.



From the perspective of each generation line, the TV panel inventory of the panel factory has returned to the healthy level after more than half a year of production adjustment. In the first quarter of this year, with Chinese brand factories starting the May Day and 618 promotion in advance to stock up, not only driving the demand to recover, but also pushing up the price of TV panel to rebound in advance. In the second quarter, panel prices will maintain the rising trend.