According to data released by Jibang Consulting Optoelectronics Research Center (WitsView), global TV panel shipments reached 136.89 million in the first half of this year, an increase of 11% year-on-year. This has reversed the decline in shipments last year, which is considered to be the cause. The continued decline in global TV panel prices has driven the desire of users to buy.
The rise in panel prices has led to a decline in global TV shipments
LCD TVs have been popular all over the world for many years, and the demand of users has gradually been satisfied. This has led to a decline in the growth rate of LCD TVs. In 2016, global TV shipments increased by only 1.6% year-on-year.
In 2016, the global TV panel was in short supply. In order to reduce the impact of panel price increase and out-of-stocks, Hisense, the second largest TV company in China, actively promoted the development of laser TV. Samsung, the world’s largest TV brand, stopped for it because of panel company Sharp. The supply panel, in order to ensure the rare supply of the panel, has reached a cooperation agreement with its main competitor LG.
Panel shortages have caused panel prices to rise from 2016 and continue into the first half of 2017. Panels account for about 60% of TV costs. The rise in panel prices has led to an increase in global TV prices, which has affected users' desire for consumption. Data show that in 2017, global LCD TV shipments decreased by 4.1% year-on-year, which is the lowest point in the past three years, indicating that the panel price increase has brought a large negative impact on the industry.
Panel price turn
In the second half of 2017, the global TV panel supply trend changed. China's largest panel company, BOE, put into production the world's most advanced 10.5 generation line in October 2017. The production capacity of the panel has grown rapidly, and the shortage of panels has been alleviated or even exceeded. Another reason for the surplus of the panel is that the OLED panel is at the high end. The popularity of the TV market, OLED TV accounted for more than 50% of the global high-end TV market in 2017. This is the first time that OLED TVs have surpassed LCD TVs, which has also exacerbated the surplus of LCD panels.
Affected by this, since the second half of last year, the global TV panel prices have continued to decline, and the decline in panel prices has led to a decline in panel companies' revenues and profits. In the first quarter of this year, BOE’s results showed that revenues fell by 19.6% year-on-year. After deducting non-recurring gains and losses, the net profit attributable to shareholders of listed companies decreased by 58.01% year-on-year.
BOE has recently become the world's largest TV panel supplier after its 10.5-generation line is put into production. This is the first time that it has surpassed LGD to become the world's largest TV panel supplier. The rapid increase in panel production capacity has led to many panels including BOE. In order to solve this problem, the company reportedly received a notice from the BOE at the end of June that the price of the 65-inch panel was lowered by 20%, indicating that the company tried to increase its market share, which further promoted the market. The price of the panel has dropped.
Declining panel prices boosted sales of LCD TVs
With the continued decline in panel prices, the price of global television has fallen rapidly. Take 32-inch TV as an example. Last year, the TV price of this size was still around RMB 1,000. The cheapest price on the market has been reduced to RMB 750, a year-on-year drop.
The decline in the price of TV is conducive to attracting the market upgrade of LCD TVs in China and Europe and the United States. Users either buy OLED TVs or buy larger-size LCD TVs. In the Chinese market, from the fourth quarter of last year to 65-inch or more TVs. The increase in sales has shown that the price drop has attracted many users to upgrade their TVs.
The decline in TV prices is also conducive to opening up emerging markets. India, Africa and other markets are far from popular LCD TVs. For example, in the Indian market, CRT TVs accounted for about 50% in 2014. The sharp drop in LCD TV prices is undoubtedly conducive to the popularization of LCD TVs in these markets. LCD TVs that have been sold at a cheap price have achieved good sales in the Indian market.
It is precisely under the influence of these favorable factors that the global TV market has rebounded, which in turn has promoted the double-digit growth of TV panels in the first half of this year, setting a new high in the past three years. For Chinese panel companies and TV companies, this is a question worth considering. When everyone is worried that the global TV market is gradually saturated, there are actually emerging markets such as Africa and India that have not yet been fully developed. These markets are expanding to increase market share.