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Warning Light Comes On About Big Drops In LCD Prices

Edit: Blaze Display Technology Co.,Ltd      Date: Aug 29, 2017

The LCD (liquid crystal display) industry, which is one ofKorea's leading IT (information technology) export industry, is faltering these days. The average LCD price which had extended about 30% since March of last year, peaked and began to fall at the end of June. LG Display and Samsung Display, the world's No. 1 and No. 2 display makers, have become busy, preparing for countermeasures, as some say that prices are expected to fall 20% by the end of the year, riding on a full-fledged downward spiral.


The average price of LCD TV panels in early August dropped to 2.4 percent from US$ 194.4 a month earlier, according toTaiwanmarket researcher WitsView. The price of the top-of-the-line 65-inch UHD (ultra-high definition) LCD panel is expected to decline 3.2% from US$ 436 in June to US$ 422 this month. An official of the display industry said, "If the average panel price drops by more than US$ 3 per quarter, we think it is on the skids." IHS, aUKmarket researcher, also predicted in a recent report, "Due to an LCD panel glut, LCD panel prices will fall 15% to 20% during the second half of the year. Considering that LCD prices surged more than 30% since March of last year, the situation changed significantly.


Shrinking demand and increased output have put pressure on LCD panel prices from both sides. The TV market which accounts for about 40% of LCD panel demand is plateauing out. "HIS expected LCD TV shipments to 199 million units in January this year but lowered it to 193 million units in May and to 181 million units in July," said Koh Jeong-woo, a researcher with HN Investment & Securities Researcher. Rumors that Chinese TV makers that have led TV demand will cut inventory in the second half of this year are also affecting a drop in LCD prices. OLED panels are on the rise as mainstream smartphone screens, and OLED panels are being adopted as displays for tablets and monitors, which is a negative factor for the LCD industry.


In terms of supply, the expansion of production by Chinese display manufacturers such as BOE and CSOT is pulling down prices. In 2014, BOE's production of LCD TVs was only 17.15 million units per year, but it expanded to 43.85 million units in two years. CSOT also increased shipments from 24.68 million units by over 10 million units during the same period.


 

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