Downstream manufacturers stock radical LCD TV panel prices are rising
February 27, 2023
Core tips: The horizontal price trend of LCD TV panel that has lasted for several months will be broken, and the panel industry is expected to start a new round of growth cycle. "After the Spring Festival, the panel purchasing demand of TV brand manufacturers in China has gradually changed from conservative to radical. The main driving factor is that the brand manufacturers expect the panel price to rise, and stock up in advance to reduce the pressure on the potential cost rise in the later period." Zhang Hong, research director of the TV business unit of Qunzi Consulting, told China Securities News.
The horizontal price trend of LCD TV panel that has lasted for several months will be broken, and the panel industry is expected to start a new round of growth cycle. "After the Spring Festival, the panel purchasing demand of TV brand manufacturers in China has gradually changed from conservative to radical. The main driving factor is that the brand manufacturers expect the panel price to rise, and stock up in advance to reduce the pressure on the potential cost rise in the later period." Zhang Hong, research director of the TV business unit of Qunzi Consulting, told China Securities News.
Increased bullish expectations
After 14 months of price correction, the global LCD TV panel once saw the dawn of price rebound in October last year, but the rise only lasted for 2 months before entering a sideways situation. Now, the industry is bullish again.
Hu Jiarong, an analyst at Jibang Consulting, said that although international brands were still subject to the unclear demand of European and American markets and strictly controlled the purchase volume, domestic TV brands began to stock for 618 promotion. In addition to the main domestic brands, TV brand factories and small brands are also following up with the increase of orders, making the overall supply and demand of TV panels tight.
"Under the background of continuous stock of domestic TV brands, it is expected that the price of TV panels of all sizes will rise in March. Among them, the price of 32-inch to 55-inch will rise by 3% - 5%, and that of 65-inch will rise by 7% - 9%." Hu Jiarong said that the price of TV panels is expected to return to the cash cost level.
Ovi Cloud, a data service provider in the home appliance industry, believes that the market sentiment is gradually changing, and the TV machine factory will advance the stock to February, which leads to the shortage of panel supply in the short term and the rise of panel price. It is reported that second-tier TV manufacturers are significantly increasing panel orders, and global TV panel shipments in the second quarter are expected to increase by nearly 20% year-on-year.
"At present, the overall crop growth rate of the industry is still at a low level, superimposed with a low inventory situation, and the demand for price increase is strong. LCD products have the opportunity to meet the demand for both quantity and price." BOE A said in a recent survey.
The price of large-sized panels is more powerful. Zhang Hong said, "At present, the profitability of small size LCD TV panels is slightly better, and the profitability of large size is worse, so panel manufacturers will be more aggressive in the price increase of large size products."
Performance is expected to improve
Last year, the shipment of TV panels was affected by the sudden drop in terminal demand. The price of TV panels fell below the cash cost, and the panel factory fell into serious losses. Subsequently, panel manufacturers took the initiative to control production. Through the adjustment of nearly half a year, the panel inventory has reached a healthy level.
"The panel factory still controls the crop growth rate. At present, the overall crop growth rate of the panel production line above the 6th generation line has not changed compared with the fourth quarter of last year, and remains at about 70%. However, with the recovery of stock demand, the crop growth rate of the panel factory will increase in the second quarter." Zhang Hong said that with the simultaneous increase of crop growth rate and panel price, the performance of the panel factory is expected to improve.
It is worth mentioning that the sharp drop in shipping costs will promote the export of domestic TV brands, and then drive the demand for panels. Zhang Hong said: "Based on the 40-foot container, the shipping cost at the peak period is about 20000 dollars, which has fallen back to less than 2000 dollars. This will greatly help the large-scale LCD TV sold to the North American market. It is expected that this year's TV will have the quantity and structure optimization in the North American market."
Yang Jingping, chief analyst of Omdia display panel research practice, said that from this year, global TV brands and OEM manufacturers will increase panel orders.
"Due to factors such as seasonality, new product launch time, promotional activities, etc., TV manufacturers' procurement strategies will be different. From the perspective of the benign development of the industry, it is acceptable to let the panel factory operate at a loss for a long time, and the reasonable price rise is acceptable." A staff member of a head TV brand factory told China Securities News.