Panel prices break five quarter fall in October
According to TrendForce's latest panel price report, TV panel pricing is expected to arrest its fall in October after five consecutive quarters of decline and the prices of certain panel sizes may even be poised to move up.
The price decline of IT panels, whether notebook panels or LCD monitor panels, has also begun showing signs of easing and overall pricing of large-size panels is developing towards bottoming out.
TrendForce indicates, with panel makers actively implementing production reduction plans, TV inventories have also experienced a period of adjustment, with pressure gradually being alleviated. At the same time, the arrival of peak sales season at year’s end has also boosted demand marginally. In particular, Chinese brands are still holding out hope for Double Eleven (Singles’ Day) Shopping Festival promotions and have begun to increase their stocking momentum in turn. Under the influence of strictly controlled utilisation rates and marginally stronger demand, TV panel pricing, which is approaching the limit of material costs, is expected to halt its decline in October. Prices of panels below 75 inches (inclusive) are expected to cease their declines. The strength of demand for 32-inch products is the most obvious and prices are expected to increase by US$1. As for other sizes, it is currently understood that PO (Purchase Order) quotations given by panel manufacturers in October have all increased by USD 3~5. Currently, China's Golden Week holiday is ongoing but, after the holiday, panel manufacturers and brands are expected to wrestle with pricing. Based on prices stabilising, whether pricing can actually be increased still depends on the intensity of demand generated by branded manufacturers for different-sized products.
TrendForce observes that the current demand for monitor panels is weak, and brands are poorly motivated to stock goods. At the same time, the implementation of production cuts by panel manufacturers has played a role and the room for price negotiation has gradually narrowed. At present, the decline in panel pricing has slowed. Prices of small-size TN panels below 21.5 inches (inclusive) are expected to cease declining in October due to reduced supply and flat demand. As for mainstream sizes such as 23.8 and 27-inch, price declines are expected to be within USD 1.5. The current demand for notebook panels is also weak and customers must still face high inventory issues and are relatively unwilling to buy panels. Panel makers are also trying to slow the decline in panel prices through their implementation of production reduction plans. Declining panel prices are currently expected to continue abating in October. Pricing for 14-inch and 15.6-inch HD TN panels are expected to drop by USD 0.2~0.3, falling from a 1.8% drop in September to 0.7%, while pricing for 14-inch and 15.6-inch FHD IPS panels are expected to fall by US$1~1.2, falling from a 3.4% drop in September to 2.4%.
Compared with past instances when TV panels drove a supply/demand reversal through a sharp increase in demand and spiking prices, this current period of lagging TV panel pricing has been halted and reversed through active control of utilisation rates by panel manufacturers and a slight increase in demand momentum. The basis for this break in decline and the subsequent price increase is relatively weak. Therefore, in order to maintain the strength of this price backstop and eventual escalation and move towards a healthier supply/demand situation, panel manufacturers must continue to strictly and prudently control the utilisation rate of TV production lines, in addition to observing whether sales performance from the forthcoming Chinese festivals beat expectations, allowing stocking momentum to continue, and laying a solid foundation for TV panels to completely escape sluggish market conditions.
The price of IT panels has also adhered to the effect of production reduction and the magnitude of its price drops has gradually eased. TrendForce believes, since the capacity for supplying IT panels is still expanding into the future, it is difficult to see declines in mainstream panel prices halt completely when demand remains weak. Even if new production capacity from Chinese panel factories is gradually completed starting from 2023, price competition in the IT panel market will intensify once products are verified by branded clients, so potential downward pressure in pricing still exists.
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