After the epidemic, demand has slowed down significantly, coupled with the continuous release of new production capacity, resulting in an imbalance between supply and demand in the panel market. In order to solve the problem, panel makers have started to reduce the utilization rate of production lines to below 70% since the second half of 2022 in order to effectively eliminate inventory. According to TrendForce, as demand for TV panels picks up recently and TV quotations rise, the utilization rate (in terms of area) of LCD production lines above Gen 5 is expected to rise to 77% in the second quarter, but the actual output area of LG Display (LG Display) ) after converging P6, P7 and Guangzhou LCD production lines, it still decreased significantly compared with the same period last year.
According to TrendForce, the current recovery of panel makers’ utilization rate comes from actual order demand. Therefore, the supply-demand ratio of the LCD market in the second quarter should maintain a healthy level due to the recovery of utilization rate. In the second half of the year, panel makers still need to maintain careful control and rapid response strategies in order to maintain market balance.
From the perspective of each generation line, after more than half a year of production adjustments in panel makers, TV panel inventory has returned to a healthy level. In the first quarter of this year, as Chinese brand factories started stocking up ahead of the May 1st and 618 promotional schedules, this not only drove demand back up, but also pushed up TV panel quotations and rebounded ahead of schedule. The upward trend in prices remained unchanged in the second quarter. TrendForce estimates that more than 90% of production capacity is used for Gen 10.x production lines, which mainly produce TV panels, and the production line utilization rate will increase by more than 10 percentage points from the first quarter to 83.2%.
In terms of Gen 8.x production lines, demand for LCD monitors and notebook panels was booming during the epidemic, and most panel makers had shifted part of their TV production capacity to IT production at that time, although the recovery in demand for TV panels also helped Gen 8.x production However, due to the fact that the demand for IT products did not increase significantly, the utilization rate only increased by 7.6 percentage points from the first quarter to 79.4%. For the production lines below Gen 7.5, the demand for mobile phone panel repair market is increasing, and the demand for some IT panels is still relatively low. Driven by the growth in the first quarter, the utilization rate will rise to 69%. TrendForce is still conservative about the growth.
(Source of the first picture:Flickr/Mark Krynsky CC BY 2.0）
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