Omdia expects a continued glut of TV panels in 2022, but a reversal in the second quarter. With panel prices likely to bottom out in the first quarter of 2022, panel demand will increase from the second quarter of 2022 due to promotional sales of the FIFA World Cup; In addition, when component bottlenecks recur, panel demand will recover and cause shortages.
Several factors will cause the panel oversupply problem to worsen in 2022 until demand elasticity is reached again. Factors such as new capacity in China, reduced post-COVID-19 panel demand, shortages of non-panel parts and logistics issues could lead to double-digit declines in panel prices in the first half of 2022.
In 2022, Samsung Display plans to produce more than 1 million QD OLED TV panels, while Lg Display plans to produce more than 10 million WOLED TV panels.
COVID-19 has caused severe volatility in the display panel industry this year. With the end of 2021 approaching, Omdia looks back at the display industry in 2021 and forecasts for 2022.
Below is a review of various topics related to the large size display panel industry.
TV panel supply and demand
2021: Acreage-based demand is expected to grow by 6%, but capacity will grow by more than 11%, according to the model. The sharp decline in demand, especially in the third quarter of 2021, saw the excess rate of large-size display panels rise to more than 10%, leading to oversupply in the third and fourth quarters of 2021.
Outlook for 2022: Omdia expects a continued panel glut in 2022. With panel prices likely to bottom out in the first quarter of 2022, TV panel prices will gradually rebound from the second quarter of 2022 due to increased panel demand due to FIFA World Cup promotions and sales; As component bottlenecks are eased, panel demand will recover. Panel pricing strategies and demand resilience will be critical in the first quarter of 2022 -- panel makers must determine the extent of price cuts to stimulate demand again. At the same time, since TV demand will change dramatically in the post-pandemic era, the price of TV panels will likely cycle twice within a year as supply and demand change.
Production capacity transfer and structural adjustment
2021: Many panel suppliers are switching their TV capacity to IT capacity, especially in the eighth-generation line and smaller plants, because of stronger demand for IT panels. The company has also begun converting some of the suzhou plant IT acquired from Samsung Display to IT capacity.
Outlook for 2022: More panel vendors plan to shift additional LTPS TFT LCD capacity in their 5.5-gen and 6-gen plants to on-board display panel and laptop panel production. Chinese panel makers have shifted a-Si TFT LCD capacity to notebook panels at line 8.5 and line 8.6 plants. The supply of notebook panels will increase over the next few years as LTPS TFT LCD capacity increases at 5.5-gen and 6-gen factories.
Panel pricing
2021: Panel prices rose sharply in the first half of 2021 as panel manufacturers withdrew their panel requirements amid component shortages; As a result, demand for panels fell sharply at the time. However, reduced panel demand and high retail prices due to the easing of lockdown policies began to affect panel prices; TV panel prices fell sharply in q3 2021 and are expected to decline further in Q4 2021.
2022 outlook: Several factors will cause the panel oversupply problem to worsen in 2022 until demand elasticity is reached again. New capacity in China, reduced post-COVID-19 demand for panels, shortages of non-panel parts and logistics issues could lead to a sustained decline in panel prices in the first quarter of 2022. With panel prices likely to bottom out in the first quarter of 2022, panel demand will increase from the second quarter of 2022 and TV panel prices will gradually rebound; Meanwhile, component bottlenecks and shortages will continue to affect panel prices in 2022. Since TV demand will change dramatically in the post-pandemic era, the price of TV panels will likely cycle twice a year as supply and demand change.
New OLED TV panel size
2021: Lg Display begins production of 83-inch and 48-inch OLED TV panels using MMG (Multi-Model Glass) process at its Guangzhou plant. The glass is more efficient than 77-inch and 48-inch OLED TV panels, and Lg Display wants to make 80-inch OLED TV panels and break into the larger panel market to compete with LCD TV panels. Boe will start producing 100-inch LCD TV panels in the third quarter of 2021, and mass produce 110-inch LCD TV panels.
Outlook for 2022: Lg Display plans to produce 10 single-cut new 42-inch OLED TV panels at its Paju plant. Lg Display will also develop single-cut products for 31-inch, 45-inch and 97-inch OLED TV panels in 2022. Huike will also develop a 100-inch LCD TV panel.
4K/8K resolution for the TV panel
2021: Chinese panel makers such as Huaxing Optronics, BOE and Huike have been producing more 8K TV panels as sports events and Samsung Display exit the LCD TV business. However, high TV panel prices reduced demand for 8K TV panels to an estimated 671,000 units.
Outlook for 2022: Samsung Electronics plans to promote more 8K LCD TVS with 8K panels provided by Chinese panel manufacturers. Currently, panel makers with 10.5 generation line factories are actively producing 8K TV panels, and Omdia expects some Chinese panel makers to produce 8K 60Hz panels as a cheaper option in 2022.
Chinese panel makers dominate LCD
2021: Huaxing Optronics starts mass production at its second 10.5 generation line plant (T7) in the first quarter of 2021. Huike started mass production of its other 8.6 generation plant (H5) in the second quarter of 2021. Samsung Display is already planning to mass-produce its QD OLED plant by the end of 2021. All of China's panel plants have a capacity of about 230 million square miles, or 61 percent of global capacity.
Outlook for 2022: Opportunities for Chinese factories to expand their capacity; For example, Whitaker expanded its capacity to H2, H4 and H5 plants. Boe may further expand capacity at its B17 plant after achieving 180,000 sheets/month, with an additional capacity of 120,000 sheets/month. All panel plants in China are expected to account for about 65 per cent of global capacity.
OLED TV and QD OLED TV
2021: Lg Display has increased capacity at its Guangzhou plant with the goal of increasing market capacity. Omdia forecasts demand for 8 million OLED TV panels. Samsung Display has planned to start production at its first QD OLED plant and ship QD OLED TV panels in the fourth quarter of 2021.
Outlook for 2022: Samsung Display plans to produce more than 1 million QD OLED TV panels, while Lg Display has an ambitious plan to produce more than 10 million WOLED TV panels. Samsung Electronics, the best-selling TV brand, will purchase QD OLED and WOLED panels.
Profit margins of panel makers
2021: Inventory at panel suppliers was below normal at the end of 2020 and the first half of 2021. As panel purchases declined, panel suppliers reduced glass inputs and managed their inventory levels in the second half of 2021 to prevent panel prices from free-falling.
2022 outlook: Omdia expects panel demand to reach saturation in the first half of 2022. Panel plant utilization in the first quarter is likely to be lower than in the fourth quarter of 2021, while lower panel prices will affect margins. However, it is expected to pick up gradually from the second quarter onwards.
