Large flat-panel display market to rebalance in 2019 | 4K/UltraHD | News | Rapid TV News
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Research from IHS Markit has found that after a period of oversupply, the large flat-panel display (FPD) market will move towards a more balanced and even tight market by the third quarter of 2019, albeit for a brief period.

IHS LFP 4March2019In its AMOLED and LCD Supply Demand & Equipment Intelligence Service report, the analyst says that production capacity for large FPDs — defined as screens larger than 9 inches — has generally been growing at a faster rate than demand for more than a year now. This growth mainly comes from new Gen 8.6 and Gen 10.5/11 factories in China, in addition to productivity improvements at legacy factories. IHS Markit data shows that with the exception of the third quarter of 2018, when demand was seasonally high, prices have deteriorated continuously since the second half of 2017. In the fourth quarter of 2018, weighted-average large-panel prices fell 2.7%. The analyst expects this rate of decline to accelerate to 5.4% in the first quarter of 2019.

Yet IHS Markit adds that the current imbalance for large FPDs is causing panel prices to fall, which is weighing heavily on profitability of panel makers. It adds that the associated declining profitability is already contributing to capacity rationalisation and low prices are currently expected to stimulate demand. It forecast that what it calls the current large FPD glut will fall to 8.2%, below the 10-% balance bar, in the third quarter of 2019.

Looking forward, IHS Markit believes that the trend revealed in its study will see some panel makers will also either close legacy LCD facilities or convert them to organic light-emitting diode (OLED) lines while some others will postpone their planned investment in new facilities. Moreover, it predicts that a more balanced supply of large FPD panels should lead to firmer pricing and profitability.

IHS Markit added that some TV makers are also now predicting tighter supply later this year and have begun to increase panel procurement, which is already encouraging panel makers to start negotiating price increases on some panel sizes. It predicts that demand for large FPD panels will increase to 57 million square-meters in the third quarter of 2019, up about 10% from a year ago.

“Capacity reduction and shuttering of existing FPD factories, in addition to reduced utilisation rates in the first quarter of 2019, looks like a harbinger of a growing trend,” noted IHS Markit senior director Charles Annis in the AMOLED and LCD Supply Demand & Equipment Intelligence Service report. “With so much new capacity currently being built out, substantial amounts of uncompetitive legacy production capacity are expected to be taken offline, as the industry works to balance supply and demand. Although there are caveats about the global economy, early year optimism and market timing, lower prices continue to spur demand expectations. As excess capacity is shuttered and demand increases, supply and demand will self-correct over time.”