Rising LCD Prices for 3 Consecutive Months Thanks to COVID-19

TV, modern flat screen LCD, LED.

[Asia Economy Reporter Changhwan Lee] Prices of liquid crystal display (LCD) TV panels have continued to rise for three consecutive months. This is attributed to production disruptions at major LCD manufacturers in China due to the novel coronavirus disease (COVID-19), causing prices to surge.

According to market intelligence firm WitsView and KB Securities on the 14th, the price of LCD TV panels in the first half of March rose about 5% compared to the same period last month, marking the largest increase in approximately 40 months since November 2016.

LCD TV panel prices have been rising for three consecutive months since January. The rate of increase was 0.2% in January, 11% in February, and is expected to exceed 10% for the entire month of March.

By panel size, prices of mid-to-large-sized TV panels with high profitability, such as 65-inch, 55-inch, and 43-inch panels, have been on the rise since January. For the entire first quarter, the average panel prices for 65-inch and 55-inch sizes increased by 0.9% and 3.6%, respectively, compared to the previous quarter.

LCD TV panel prices had been declining for a long period from 2017 until the end of last year due to the influx of low-priced Chinese products and intensified market competition. However, since rebounding in January after 33 months, prices have continued to rise.

The main reason for the rise in LCD TV panel prices is the halt in operations at major LCD factories in China caused by COVID-19, leading to supply disruptions.

Wuhan City in Hubei Province, China?the epicenter of COVID-19?is home to major Chinese LCD manufacturers including BOE, the world's largest LCD TV panel company, as well as CSOT (China Star) and Tianma. Market intelligence firm IHS Markit has analyzed that production at all LCD factories in China dropped by at least 10% and up to 20% last month compared to the previous month.

Last year, prices plunged due to oversupply of LCD TV panels, prompting major companies such as LG Display and Samsung Display to reduce production.

In this situation where LCD TV panel supply is limited and COVID-19 is spreading, panel prices are rising sharply.

Accordingly, profits of companies like LG Display and Samsung Display are expected to improve. Researcher Hyunsoo Kim of Hana Financial Investment stated, "Given this trend, panel price increases are likely to continue until the third quarter," adding, "Profitability improvements for Korean and Taiwanese LCD panel manufacturers will continue."

This content was produced with the assistance of AI translation services.