Record high global TV panel shipments have ended a two-year period of decline to reach a total of 136.89 million pieces for 1H18 according to research from WitsView.
Explaining what represents a year-on-year growth of 11%, the analyst says that after a high price level in the first half of last year, TV panel prices have been decreasing since the beginning of 2018, pushing brands’ panel purchases. It noted that panel makers also offered special deal projects to increase the shipments, which further lowered the panel prices.
In terms of brands, BOE surpassed LG Display for the first time and ranked the top; Innolux ranked the third with special deal projects. WitsView calculates that BOE’s shipment of 65-inch panels increased quart-on-quarter by 381.8% in 2Q18, as its world-first Gen 10 fab entered operation. In terms of small size products, BOE has seen stable demand for 32-inch panels in 1Q18 thanks to stock-ups for the World Cup. As the demand has been pulled in the second quarter and its Gen 8.5 fab in Fuqing continued to ship products, BOE has offered special deal projects to consume the capacity of its 32-inch and 43-inch products. The company’s total shipments reached 25.625 million pieces in 1H18, a growth of 31.4% over a year ago.
This said WitsView was the best shipment performance among the six major TV panel makers, making the company surpass LGD and go back to the top of shipment ranking for the first time. LGD has been trying to obtain higher revenue and profit from limited production capacity in order to compete with the large new capacity of Chinese panel makers. As a result, its share of 43-inch panels decreased and that of 75-inch in Gen 7.5 fab increased. It also decreased 49-inch and increased 55-inch and 65-inch ones in Gen 8.5 fab. Although the size adjustments affected LGD's shipments in the first half of this year, which saw a YoY decline of 4.3% to 24.199 million pieces, WitsView says that the adjustment strategy still works since the total shipments of 55-inch, 65-inch and 75-inch increased by 10.1% YoY.
Third placed Innolux was said to be influenced by the poor demand for 39.5-inch and 50-inch panels, ending up with increasing inventory level and weak shipments. Therefore, Innolux also provided special deal projects in May and June to consume the inventory. Its shipments increased significantly to 5.11 million pieces in June, a new monthly high. In total, Innolux shipped 20.831 million pieces of TV panels in 1H18, a YoY growth of 2.9%, bringing Innolux to the third place in the ranking.
Other notable events noted in the report were that CSOT’s annual maintenance of its first Gen 8.5 fab (T1) in this March indirectly affected the production and shipment of the month, but that the new capacity of its second fab (T2) has been operating at its full capacity from 2Q17, driving its 55-inch shipments to grow by 12.6% in the first half of this year. it total shipments of CSOT reached 19.292 million pieces, a YoY increase of 6.2%.
Samsung Display (SDC) has adjusted its TV panel shipping strategy from keeping the shipment level to ensuring profitability and has simplified its product mixes from last year to increase the effective production capacity and to maximise production volumes. As a result, the company’s shipments of 55-inch and 65-inch panels still grew by 28.9% and 30.3% respectively in 1H18, even the demand weakened in the second quarter of this year, and its L7-2 and L8 factories had annual maintenance. SDC’s total shipments reached 19.281 million pieces, a YoY increase of 4.7%.
“The global TV panel production capacity will increase by 8.7% YoY in 2018 as the three new fabs enter the market during the year”, said WitsView research manager Iris Hu. “Therefore, specification or size upgrades will be a must for panel makers.” For the first half of 2018, Chinese panel makers still allocated considerable capacity to 32-inch panels, which accounted for 32.4% of the total shipments. This size recorded a YoY shipment growth of 26.2% in 1H18, and will boost the whole year’s shipments to a new high of 277.1 million pieces. However, the large share of 32-inch panels will also restrain the average panel size growth. For 2018, the average size is estimated to be 45.2-inch, a marginal growth of 0.6-inch from last year.