With the end of COVID-19 and high prices and interest rates, the global demand for TVS is plummeting. Accordingly, the price of LCD TV panels, which account for 96 percent of the total TV market (by shipments), continues to fall, and major display manufacturers are accelerating the pace of LCD panel production reduction.



According to the Chosun Ilbo on July 13, LG Display, BOE, CSOT and HKC have cut production of LCD panels for TVS since last month. Some domestic companies have cut production by as much as 50 per cent and are restructuring.





Source: LG Display



LG Display has decided to reduce the production of LCD panels for TVS by 10-20% in the second half of this year compared to the first half. Accordingly, production line utilization has been adjusted since last month. Reduce LCD panel production by controlling glass substrate usage in LCD panel production lines in Guangzhou, China and Paju, Gyeonggi Province.





Source: BOE



Chinese panel companies are also accelerating production cuts. Boe decided to reduce the production of LCD panels for TVS by 25 percent in the second half of this year compared to the first half of this year. During the same period, Huaxing optoelectronics also began to reduce production by 20 percent. Adjust production to prevent falling prices due to reduced demand for LCD panels. HKC has cut production by 20% since May. Starting this month, Suzhou Huaxing's 8.5 generation production line (T10) has cut production by as much as 50 percent.



Display makers have started cutting LCD production because of falling demand for LCD panels due to falling sales of TVS. As TV demand fell, inventory of LCD panels began to increase, leading to falling LCD prices and depressed profits. Market research institute Jibang Consulting said: TV LCD panel prices have not bottomed out due to low TV demand, manufacturers cut shipping targets and reduced panel purchases.



Prices for 43-inch LCD panels fell 4.4% month-on-month in the second half of June, while prices for 55-inch panels fell 4.6%, according to WitsView, a market research firm. Over the same period, the 65-inch and 75-inch models also fell 6.0% and 4.8%, respectively. The same is true for LCD panels used in IT products. The price of 21.5-inch LCD panels, which are used for displays, fell 5.5 percent in a month, while 27-inch LCD panels also dropped 2.7 percent over the same period. The price of a 15.6-inch LCD panel for laptops also dropped 2.8 percent, while the price of a 17.3-inch LCD panel also dropped 2.4 percent. Since the second half of last year, the total price of LCD panels has been falling for more than 8-10 months.





Source: LG Electronics



LCD panel prices bottomed out in 2019 due to aggressive pricing policies of Chinese panel makers, but saw short-term gains as TV demand surged due to COVID-19. However, with the disappearance of COVID-19 special needs, it began to fall heavily from the second half of last year to 2019 levels. In particular, since last month, the price of the products has fallen below the cost of the products, and the company is facing more losses as it produces more. That's why domestic companies, which have been competing with production, are cutting back.



Price stabilization is expected to begin first, with TV LCD panels at the center, as display manufacturers aggressively cut production. The industry expects prices to start to stabilize by the end of this month, with prices for all LCD panels flat through the end of the year, centered on large LCD panels 65 inches or larger.