LCD Prices Continue Soaring in May... LG Display Expected to Benefit

55-inch TV Panel Up 1.3%
Impact of Soaring Demand and DDI Supply Shortage
LGD Flexibly Operates LCD Production Line
Expected Direct Benefit from Price Increase

[Asia Economy Reporter Suyeon Woo] The price of liquid crystal display (LCD) panels continues to soar in May, raising expectations for LG Display's improved performance. The demand for home appliances and IT products triggered by COVID-19 has driven up LCD panel prices since mid-last year, and recently, manufacturers' active inventory accumulation in preparation for supply shortages is expected to sustain the price increase trend into the second quarter.

According to market research firm WitsView on the 14th, the price of 55-inch LCD TV panels in the first half of this month rose 1.3% from the second half of last month to $228. Prices of other panels ranging from 32 to 75 inches also increased by about 1.3% to 2.4%. The price of IT LCD panels rose as well, with 21.5-inch monitor panels increasing 1.6% to $64.5, and 15.6-inch laptop panels rising 1.7% to $70.2.

The rise in LCD prices, which began in the second half of last year, has accelerated this year. The surge in demand for TVs and IT products due to COVID-19 has increased demand for LCD panels, coupled with a semiconductor shortage that has worsened the supply shortage of display driver ICs (DDI), which play a key role in panel operation.

The price of 55-inch LCD TV panels, which have the highest shipment volume, reached $206 in April, surpassing $200 for the first time in over four years since July 2017 ($207). In May, it rose further to $228, maintaining the upward trend, which is expected to continue until next year. Especially from the second quarter, TV and IT manufacturers, sensing LCD supply concerns, are actively increasing inventory, which is expected to widen the price increase margin through the second half of the year.

Since last year, domestic companies such as Samsung and LG Display have reduced LCD production capacity, and Chinese display companies are also unable to aggressively expand production, so the LCD supply shortage is expected to continue for some time. The semiconductor driver IC (DDI) supply shortage also seems difficult to resolve in the short term.

Dongwon Kim, a researcher at KB Securities, said, "Global semiconductor companies are taking a passive stance on new DDI capacity expansion," adding, "Even if new expansion starts now, it will take at least more than a year to increase production capacity."

Among domestic companies, LG Display is expected to directly benefit from the rise in LCD prices. In the first quarter conference call, LG Display announced a flexible operation plan for domestic LCD production lines and said that it is still producing TV LCD panels at the P7 (Paju 7th generation LCD factory) line at the request of customers.

An LG Display official said, "We are not shutting down all domestic LCD production lines but reducing the proportion of TV panels and converting them for IT use," adding, "We will focus on improving profits by diversifying the portfolio, such as focusing on IT LCD panels."

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