2020 Display Outlook: Increased Uncertainty, Adjustment Of Market Stress, Accelerated Structural Differentiation

- Mar 06, 2020-

The uncertainty of the global political and economic pattern in 2019 has further increased, and protectionist, unilateral, geopolitical conflict, and populist activities have created a series of challenges to the global political and economic order. According to the latest data from the International Monetary Fund (IMF), global GDP growth in 2019 is only 2.9%, a decline of 0.7 percentage point from 2018. Global economic growth has slowed, consumer demand has fallen, and supply chains have been volatile. In the face of common challenges at the macro level, Sigmaintell data shows that the global display unit market shipments in 2019 reached 130 million units, which is basically the same as in 2018, and declined slightly. We now total the 2020 display market forecast.

Market forecast for 2020: market size will fall, structural opportunities will revitalize stocks, and epidemic will affect supply and demand

Under the premise of the gradual cessation of trade frictions, the global display market's stress response to the state of environmental uncertainty will further weaken. At the same time, in response to the risks inherent in trade frictions, the adjustment of the display industry chain has been advanced in 2019. The above measures will once again reduce the possibility of stressful growth in the display monitor market. Affected by this, Sigmaintell believes that the global display market in 2020 will fall back to the normal state before 2018, and the epidemic will add to it, and will continue to decline year-on-year. Under this premise, in the long run, the market still needs to seize structural opportunities, such as e-sports, high scores, widescreens, and curved surfaces. In the short term, market risks in the first quarter mainly come from new coronavirus epidemics.

1. Structural opportunities revitalize stocks. Throughout the past years, the global display panel supply scale and the trend of the overall device shipment scale, it is not difficult to find that, due to the iteration of technology and display applications, since 2012, after experiencing a multi-year recession, the global display market has changed from 2017 Began to enter a relatively stable state of the stock market. 2018 to 2019, due to the macro-environmental uncertainties, there will be a stressful growth. This growth will decline in 2020, and the market will return to the stock state. It is difficult for the stock market to achieve volume growth. The vitality of the market lies in grasping structural opportunities and using structural opportunities as new increments to revitalize the stock.

Judging from the market trends in 2019, the e-sports market is growing the fastest. Based on the huge game user population and the thriving game industry, e-sports displays have achieved interoperability at multiple levels such as technology, cost, channels, and sales. Its technical definition accuracy, product refinement, consumer awareness, and market penetration have all improved significantly. Sigmaintell believes that the penetration rate of e-sports in the global display market in 2020 will further increase. Secondly, the widescreen market also contains growth potential. With the concept of design products, the demand for split-screen and multi-screen office scenarios is expected to continue to grow. Various parties in the display supply chain are also actively working together on widescreen displays, which will drive the rapid development of the widescreen display market in 2020.

2. Market in the first quarter: The epidemic affected the supply chain, and supply and demand fell in the first quarter. Qunzhi Consulting's "Analysis Report on the Impact of the New Coronavirus Epidemic on the Display Market" shows that affected by the epidemic, the return rate of display OEMs in China in the first quarter was not as good as expected. The foundries in Hubei include TPV, etc. The start of construction will continue to be delayed in February, the resumption time will be determined, and the loss of production capacity will exceed 50%. The production resumption of display foundries in other regions of the country is also less than expected. The overall production loss of display foundries in February was as high as 40%. It is expected to gradually recover in March, and the operating rate will reach 80% to 90%. In addition, in terms of materials, transportation in Hubei Province continued to be suspended, and the recovery time has not been determined, which has a significant impact on the supply of related materials. Especially PCBA, flexible circuit board, etc. Sigmaintell predicts that due to the low rate of factory resumption, the global display supply chain will be in tight supply in February.

From the demand side, the Chinese display market demand is affected by the epidemic, the commercial market and offline consumer market will shrink significantly, and only the online market will maintain growth. It is estimated that the total domestic display shipments in the first quarter will decline by 20% year-on-year. The epidemic also exists in markets outside China, affecting consumer confidence and demand. The tightening of the supply side will further affect the demand of the end market. Sigmaintell estimates that in the first quarter of 2020, the global display unit market will ship approximately 28.1 million units, down 8% year-on-year.