Jiwei.com reported that in the past two years, the panel industry has been in a rare cyclical fluctuation. After the longest boom cycle in nearly a decade, the industry has ushered in a reversal since the second half of 2021, and the panel price has also continued to fall so far. The rise and fall range exceeded the expectations of panel enterprises such as TCL technology, and its operating performance also fluctuated to a certain extent.

Nevertheless, in order to ensure the scale advantage and market position, panel enterprises still maintain a high production rate. Industry insiders pointed out that “in the case of market downturn, Samsung Electronics will cut orders by 30%, which will cause market panic. Other brand manufacturers also require panel manufacturers. Panel prices may continue to decline to the end of the second quarter, and whether Q3 can usher in a reversal is closely related to factors such as panel manufacturers’ production control, Russia Ukraine negotiation results, and domestic 6.18 sales.”

The price rise and fall trend exceeded expectations

It is well known in the industry that driven by the strong terminal market, the price of LCD TV panel began to rise from June 2020, and the rise continued to June 2021, ushering in the longest price rise cycle in nearly a decade. According to the author’s statistics, the price of 32 inch, 55 inch and below panels doubled, while the prices of 65 inch and 75 inch panels also saw a large increase.

Benefiting from the rising price of LCD panel and the gradual withdrawal of Korean enterprises from the LCD market, the production capacity is gradually transferred to China. The revenue of domestic panel manufacturers such as BOE and TCL technology has increased significantly, and the net profit has soared.

Data show that in the first half of 2021, BOE achieved a revenue of 107.285 billion yuan, a year-on-year increase of 89.04%; Deduction of non net profit reached 11.662 billion yuan, turning losses into profits; The revenue of TCL technology was 74.299 billion yuan, a year-on-year increase of 153.29%; The net profit deducted from non profit was 5.498 billion yuan, an increase of 2923.06% year-on-year.

This rise also reflects the share price of the two panel giants. In the first half of 2021, BOE and TCL both hit the highest share price in history, with unlimited scenery for a time.

But just after July 2021, panel prices fell sharply. The reason is that the supply and demand environment of the global LCD TV panel market has changed significantly, including the decline of European and American subsidies over the same period, the intensification of overseas inflation, the continuous rise of shipping costs and the partial overdraft of housing economy on demand.

This also has a direct impact on the operating performance of the two leading enterprises in the second half of 2021. Although its net profit for the whole year of 2021 still doubled, it is obvious that the sharp increase in performance in the first half of the year masked the impact of the decline in performance in the second half of the year.

For market changes and changes in the company’s performance, TCL technology pointed out that “in 2021, the price of large-size panels experienced a relatively rapid round of rise and fall. It can be said that the continuous rise in the first half of the year and the rapid decline in the second half of the year exceeded everyone’s expectations to a certain extent.”

Specifically, in the first half of the year, the demand for terminal goods preparation remained high and the shortage of core products in the supply chain drove the panel price to rise continuously; In the second half of the year, under the concentrated influence of short-term factors such as the withdrawal of European and American subsidy policies, the intensification of overseas inflation and shipping pressure, panel prices began to decline rapidly since the third quarter.

It is said that Samsung Electronics cut orders by 30%, causing market panic

At present, the price of LCD TV panel still maintains a continuous downward trend. According to Qunzhi consulting data, in March, except for the 32 inch panel, which stopped falling for two consecutive months, the prices of other sizes of panels continued to decline. Even less optimistic is that it expects the prices of all sizes of TV panels to continue to fall in April, ranging from $1 to $6.

Li Yaqin, general manager of Qunzhi consulting, pointed out, “at present, the price of LCD TV panel has not fallen below the cash cost, and it is above the cash cost as a whole. It is expected that the LCD TV panel will fall in the second quarter. The prices of all sizes of TV and notebook panels are falling, which means that the prosperity of the global LCD panel market is in the overall downward channel, and the situation is relatively unfavorable.”

As for the continuous decline in the price of TV panel, Dong min, Deputy Secretary General of China Electronics and video industry association, also told the author, “in the case of low overall market demand, the Russian Ukrainian crisis led to a decline of 3-4 million TV sales in the Eastern European market. It is said that Samsung Electronics cut the order by 30%, which brought panic to the market, and other brand manufacturers also negotiated with panel manufacturers to reduce product prices.”

According to AVC Revo data, Russia’s TV shipments in 2021 were 6.8 million, accounting for about 3% of global TV shipments, while Samsung and LG Electronics accounted for 26% and 17% respectively. More than 70% of these shipments are 43 inches and smaller.

Sigmaintell also pointed out that the conflict between Russia and Ukraine, global inflation and interest rate hike have cast a shadow on global TV demand, and TV manufacturers who are wary of market uncertainty have become conservative in purchasing LCD TV panels. Samsung Electronics recently cut its TV panel orders by 1.6 million units.

In the face of falling panel prices, South Korean panel manufacturer SamSung monitor also decided to withdraw from the LCD panel market. As early as March 2020, Samsung had announced that it would stop production of LCD panels, and then the rise in panel prices caused Samsung to delay the shutdown plan of LCD panels.

It is reported that SamSung monitor is located in the l8-2 production line in Yashan, South Korea, which is the only remaining LCD panel production line. According to Korean media reports, Samsung has shown that it has advanced its shutdown plan from the end of 2022 to June. After negotiating with Samsung Electronics, it will completely withdraw from the LCD business.

Q3 or reverse

Although Samsung monitors withdrew from the LCD panel market, Wuhan BOE generation 10.5 line, Mianyang Huike generation 8.6 line and TCL Huaxing T7 production line (generation 11 line) are in the stage of capacity climbing. With the continuous release of production capacity of these manufacturers, it will effectively fill the gap of Samsung monitors withdrawing from the LCD panel market, and the overall supply of panels has not decreased significantly. Qunzhi consulting predicts that the global display panel production capacity will reach a high-speed growth of 12% year-on-year in 2022, and the overall production capacity growth rate will reach the largest increase since 2013.

TCL technology pointed out that the past few years have been a key stage of national capacity transfer, with drastic changes in the industry pattern and a rapid reshuffle in the market position of enterprises