LCD TV Panel Prices on the Rise... Tug of War Between Utilization Rates and Prices

After a downward trend in the second half of last year, prices for liquid crystal display (LCD) TV panels are expected to rise again starting this month.

Panel manufacturers, mainly in China, are adjusting production volumes, and with major sporting events such as the Olympics driving increased demand for home appliances, panel demand is likely to grow this year.

According to market research firm Omdia on the 18th, the price of LCD TV open-cell panels, which had been declining since September last year, stopped falling in January this year. Open-cell panels are semi-finished products that have not undergone module processing and are closest to the cost price, making them an indicator of panel price trends.

The price of a 32-inch HD 60Hz open-cell panel dropped from $39 in September last year to $34 in December, a 43-inch Full HD 60Hz panel fell from $65 to $59, and a 50-inch 4K 60Hz panel decreased from $110 to $102, but all are expected to increase by $1 this month.

During the same period, the price of a 55-inch 4K 60Hz panel fell from $133 to $124, a 65-inch 4K 60Hz panel from $177 to $169, and a 75-inch 4K 60Hz panel from $236 to $228, but these are expected to rise by $2 each this month.

Omdia stated that panel manufacturers intend to raise prices by about 1?2% each month going forward.

LCD TV panel prices fell to record lows in the second half of 2022 due to oversupply and weak demand, as the surge in home appliance consumption during the COVID-19 period disappeared.

Subsequently, manufacturers centered in China responded by adjusting operating rates to control prices. Panel prices rose again in the first half of last year due to the peak season effect but the upward trend stalled in the third quarter.

However, having experienced a price crash caused by oversupply once before, panel manufacturers this time implemented very strict operating rate adjustments considering demand, resulting in a smaller decline than before.

Omdia explained, "When LCD TV brands and manufacturers signaled lower order volumes and demand forecasts in the third quarter of last year, panel manufacturers immediately reduced operating rates and strictly maintained policies to keep inventory levels low. As a result, despite weak demand, the decline in panel prices in the fourth quarter was slight."

Logistics disruptions caused by the Red Sea incident in January, supply shortages of cycloolefin polymer (COP) films for vertical alignment (VA) panels due to the Noto earthquake in Japan, and reduced panel production during the Chinese Lunar New Year holiday also appear to have contributed to the rebound in panel prices in February.

Additionally, with major sports events attracting high interest?such as the Paris Olympics, the National Basketball Association (NBA) Finals, and UEFA Euro 2024?TV manufacturers are aggressively marketing large-sized products, which could lead to increased panel demand and price rises.

Omdia forecasts that the demand area for LCD TV panels will reach 45.5 million square meters in the second quarter of this year, the highest level in the past three years, growing to 48.8 million square meters in the third quarter and 50 million square meters in the fourth quarter. While panel manufacturers are likely to try to gain the upper hand in price negotiations with set manufacturers by adjusting operating rates, there is also concern that excessive price increases could suppress finished product demand, making it interesting to see where the balance between the two sides will be found.

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