TrendForce predicts price increase for TV Panels
While TV shipments are at an all-time low, analysts at TrendForce see the potential for a slight increase in annual shipments, and price.
TrendForce research indicates that global TV shipments in 2023 amounted to approximately 195 million units – a 2.7% YoY decrease, setting a new low for the past decade. Looking ahead to the first quarter of 2024, which coincides with the traditional off-season for consumer products, global TV shipments are estimated to decrease by 18.9% QoQ to 43.28 million units. However, there is potential for a slight increase in annual shipments by 0.3%, reaching about 196 million units for the whole year.
TV panel prices in the second quarter may reach last year’s peak levels due to reduced production during the Lunar New Year and a tight COP supply
The supply side will be affected by the shortened number of working days during the Lunar New Year holiday in February and the tight supply of COP, leading to an early start for price increases of TV panels at the end of January. The imminent Lunar New Year has prompted many panel makers to reduce production in response to decreased demand—resulting in an average monthly utilisation rate of just 59.2% – and pushing the first-quarter average utilisation rate of panel factories below 70%.
The oversupply ratio narrowed from 3.9% in 4Q23 to 2.6% in 1Q24. Additionally, a major earthquake in Japan at the beginning of this year impacted COP supplier ZEON’s factories in Toyama Prefecture’s Himi and Fukui Prefecture’s Tsuruga. The damage to local water pipelines means they cannot be fully repaired in the short term, potentially affecting some VA panel production at the end of February to March, leading to a brewing price increase in the TV panel market.
Demand for TV panels has seen a boost, particularly from North American distributors who have been replenishing their inventories following the conclusion of last year’s promotional activities. Furthermore, since mid-January, there has been a concerted effort by brands to stock up in anticipation of a series of coming events. These include promotions tied to North American tax refunds, launches of new models for the spring season, sporting events, and the Amazon Prime Day shopping event. These factors have driven TV panel demand in the first quarter, with purchasing volumes increasing by around 6.3% compared to our initial estimates. As the market voices for panel price increases strengthen and the risk of insufficient panel production due to COP supply shortage emerges, panel makers have regained bargaining power since January.
By February, the average price increase for TV panels under 50 inches is expected to reach at least USD 1, USD 2 for 55 inches, and $2–3 for 65 inches, with further increases possible for out-of-stock models. Despite the ongoing global geopolitical turmoil and the recovery of the financial environment introducing uncertainties, current TV panel prices are above cash costs. Although this wave of price increases may not be as strong as in 2023, TV panel prices in the second quarter still have the potential to challenge last year’s highs.
TrendForce expects panel makers to continue to focus on production control, putting the profitability of TV brand manufacturers to the test.
For more information visit TrendForce.
