Oversupply Of Large-size LCD Panels How Can Panel Makers Solve Problems?

- Jul 25, 2018-

         

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Since 2018, a number of new plants with more than 10 generations have been put into production, driving the rapid growth of new generation capacity. According to IHS Markit statistics, large-size panel production capacity will increase by 31% from 2018 to 2021. The ratio of oversupply will increase year by year, which means that the panel industry will face serious oversupply in the next three years.


Oversupply of large-size LCD panels How can panel makers solve problems?


Xie Qinyi, senior research director of IHS, said that the pressure on business will be greater next year. The old generation production lines, like the 5th and 6th generations, are faced with the choice of reorganization or factory closure. Samsung's revenue for OLED panels is three times that of LCD panels, and even an evaluation of shutting down an 8.5-generation plant, focusing resources on OLED panels.


Large-size panels are oversupply, and manufacturers are under heavy pressure


The BOE 10.5 generation plant was mass-produced this year. In 2019, the 11th generation of Huaxing Optoelectronics Co., Ltd. continued mass production. The mainland's 10.5-generation panel factory was put into production successively, and the competition for large-size TV panels became more intense.


Qunzhi Consulting Li Yaqin pointed out that the growth of the TV market in the first half of this year was mainly concentrated on large size, and LCD panel manufacturers turned more capacity to large-size panels in order to make profits. For example, Innolux switched to 65 inches, and BOE switched to 55 inches. The panel maker's capacity structure is biased toward large-size panels.


According to the announcements issued by various companies, the 10.5 generation and above production lines that have been put into production and under construction are all positioned to produce screens of 65 inches and above (including 75 inches, 105 inches, etc.). If all the production lines are fully produced and the yield rate can reach 95% at full production, then the production line of more than 10.5 generations from 2018 to 2020 can produce 73.42 sets, 94.166 million sets and 54.396 million. station. The production capacity of LCD production lines above 10.5 generations worldwide will be concentrated in 2020.


Oversupply of large-size LCD panels How can panel makers solve problems?


The production capacity of oversized panels of 65吋 or more will increase significantly in the next five years, and the overall panel industry is also facing pressure from oversupply. According to IHS Markit statistics, it is estimated that from 2018 to 2021, the overall large-size panel production capacity will increase by 31%, which is about 77.7 million square meters. The ratio of oversupply in the next three years will rise year by year, from 12% in 2018, 14% in 2019, and 18% in 2020. In 2021, it will reach the peak of 2023, which means that the market will face serious oversupply in the next few years.


From the perspective of the global market, the situation of oversupply has intensified. It is understood that the first phase of the Rainbow Xianyang 8.6-generation line project will undergo a half-year mass production climb, and the monthly production capacity will reach 60,000 pieces. The capacity of BOE Hefei 10.5 generation line and CLP Chengdu 8.6 generation line is also increasing. In 2019, the 11th generation plant of Huaxing Optoelectronics will be put into production. With the continuous release of these new production lines and the production capacity of the original production line, the risk of overcapacity of TV LCD panels will further increase.


Xie Qinyi, senior research director of IHS, said that the ratio of supply to demand in 2019 has further increased to 14%. In other words, the pressure on the panel factory is even greater.


Due to the rapid growth of China's panel companies and the growing contradiction between oversupply in the global large-size LCD panel industry, the competitiveness of Korean companies in the global LCD market is also declining. According to people familiar with the matter, LGD has decided to abandon its original plan to produce large-size LCD panels at the P10 plant, all turning to OLEDs.