The price of LCD panels has dropped to 37% of the price at the beginning of the year. If the problem of oversupply cannot be solved, the earnings of the display industry will further deteriorate from the fourth quarter.
According to market research firm Witzview, the price of 32- to 43-inch TV panels fell by 3% from November to mid-December. The 55-inch panel also dropped by 3%. Compared with January of this year, the prices of 32-inch and 55-inch panels have dropped by 37% and 26% respectively.
Decline in LCD panel prices has negative effects on industry profits
It is estimated that the price drop of LCD panels will also increase because the sales season of TV is approaching the end, and Chinese display companies are increasing the operating rate of the equipment. The decline in demand caused by the global economic recession has further aggravated this downward trend. As competition has become more intense, even sales prices have fallen below production costs.
Panel makers are busy protecting their profits. Due to the drop in TV prices, even if TV sales increase at the end of this year, operating profit will still decline rapidly. The display market next year is still uncertain. Major panel companies such as BOE and CSOT will increase the supply of 50- to 60-inch panels after investing in the eighth-generation facilities. According to Witzview's estimation, the global display market will reach 794 million large-scale panel shipments, which will drop for the first time and will decrease by 4.1% from last year.
Korean manufacturers are seeking a way out of high-end products. They will focus on producing ultra-high definition 4K panels of 50 inches and above. Samsung Display will focus on the top LCD panels using Quantum Dot technology. At the same time, LG Display will focus on OLED TVs and mid-to-low-priced 4K TVs.