LCD panel will be oversupplied next year

According to a report by Korean media TheElec today (11), South Korean market research institutions believe that the oversupply of liquid crystal displays (LCD) will continue until next year. It is estimated that in the fourth quarter of this year, the operating rate of LCD factories with more than 5 generations in the world is 60%, which is the lowest value in 10 years.

The agency believes that consumer demand in the LCD panel market will continue to be sluggish next year. The global economic and geopolitical instability and rising inflation are factors that oppress consumer demand.

In addition, Korean companies such as LG Display are facing competitive pressure from Chinese display manufacturers, and LCD panel prices have been falling all the way. From June 2020 to the first half of last year, the price of LCD panels maintained an upward trend, but it has been declining since the second half of last year and has reached the level of 2019 before the start of the new crown.

Panel makers' operating rates also fell in the quarter. The operating rate of the 5th to 6th generation production lines that mainly produce IT panels is expected to be only 48.2% in the fourth quarter, down 5.9% from the previous quarter. The operating rate of the 7~7.5 generation fabs, which are mainly display panels, may continue to decline.

About 90% of the production capacity of the 10-10.5 generation production line is used for mass production of TV panels. Due to the low profit of 65-inch TV panels, BOE and TCL Huaxing Optoelectronics plan to reduce production. The operating rate of BOE's B17 factories in the fourth quarter is expected to drop by 14.2% from the previous quarter.