2020, the year of shock!
2020 is the most turbulent year for the global LCD TV panel market. The sudden new crown epidemic has pressed the buffer button for world economic development and changed everyone's living habits. However, the social isolation caused by the epidemic, home life and office work have increased the demand for consumer electronics. Consumer demand for TV will be released in the second half of 2020. The strong demand in the terminal market has pushed the price of panels to high. On the supply side, the problem of upstream material shortages has gradually become prominent and cannot be resolved in the short term. The supply gap continues to exist. At the same time, the continuous mergers and acquisitions in the panel market in 2020 will promote the gradual formation of a "two giants" competition pattern in the global LCD TV panel market, which will have a profound impact on the global display industry chain.
Shipment "V"-shaped reverse, demand is expected to continue to be strong
Driven by the housing economy and overseas proactive fiscal policies, demand in overseas markets ushered in a retaliatory rebound in the second half of the year, driving the number and area of global LCD TV panel shipments to show a significant “V”-shaped reversal, with shipments in the third quarter dropping significantly year-on-year Narrowing, the shipment area ushered in a substantial increase. According to statistics from Sigmaintell, the number of global LCD TV panel shipments in 2020 will be 266 million units, a year-on-year decrease of 6%, and the shipment area will reach 163 million square meters, a year-on-year increase of 2.1%. Shipments were weak in the first half of the year and recovered strongly in the second half.
Large size is accelerating, and the average size is expected to increase by 1.5 inches in 21 years
In terms of product structure, the strong performance of the North American market drove a significant increase in the proportion of large-size panel shipments of 50" and above, of which 55" increased by 1.1% and 65" increased by 1.6%. At the same time, the size of the white-label market was shrinking rapidly. The demand for small-size shipments has decreased. According to Sigmaintell data, the average size of global LCD TV panel shipments has increased by 1.8 inches in 2020, and it is expected to increase by 1.5 inches in 2021 to 48.6 inches. The average size exceeds The growth of 1.5 inches is expected to reduce the production capacity of over 200K G8.5 generation lines. Large size is still an effective way to reduce the production capacity of high-generation panels. The average size trend of global LCD TV panel shipments from 2017 to 2021 (unit: inch )
The concentration of manufacturers has increased, forming a "two giants" competition pattern
On the one hand, mainland panel companies actively promote industrial mergers and acquisitions, and on the other hand, they continue to invest in high-generation panel production lines, which drives the high-generation LCD panel production capacity to gather to top manufacturers such as BOE and TCL Huaxing. According to research data from Sigmaintell, China's panel makers will account for 54.7% of shipment area in 2020, of which BOE and TCL China Star account for 34.3%. This pattern will change with the implementation of mergers and acquisitions and is expected to gradually take shape The competitive landscape of "two giants".
Judging from the shipment performance of panel makers in 2020:
BOE, the number and area of shipments in 2020 will occupy the first place. 2020 is a milestone year for BOE. Its Wuhan G10.5 generation line ushered in mass production. Although the climb is not as expected due to the epidemic and material supply problems, the products are progressing in an orderly manner and the G8 has been undertaken. The 5th generation line TV products have moved significantly. At the same time, it successfully acquired the Nanjing G8.5 generation line of CLP Panda and invested in the Chengdu G8.6 generation line. In 2021, the total supply of LCD TV panels will exceed 60 million units, and it will become a super manufacturer in the field of LCD TV panels.
TCL China Star (CSOT), the G10.5 generation line is in full production, driving a substantial increase in 65" and 75" shipments, and the product structure is continuously enriched and optimized. Although the number of shipments ranks behind Innolux, the area ranks second. TCL Huaxing successfully acquired the Suzhou production line of Samsung (SDC), t7 will soon usher in formal mass production, further consolidating the supply of large-size panels. At the same time, TCL Huaxing accelerated the layout of new technologies and planned the investment in the large-size OLED production line of the G8.5 generation line.
Huike (HKC) has continuously improved its comprehensive competitiveness through active capacity expansion. In 2020, it ranked among the top five in terms of LCD TV panel shipments. It is expected that by 2021, there will be four G8.6 generation lines that can be mass-produced, and LCD TV panel production area is expected to enter the world's top three. At the same time, in anticipation of the exit of LCD production capacity of Korean factories, Huike has continuously strengthened cooperation with brand customers, and the proportion of shipments to brand customers has been significantly increased, which has played a certain role in ensuring the stability of its TV panel exports.
CEC's Panda LCD panel business is basically divested, while CHOT maintains stable and efficient operations and concentrates on improving the competitiveness of a single model. Its 50" panel shipment scale ranks first in the world.
As for South Korean manufacturers, affected by the recovery of demand and the rebound of panel prices, the Korean manufacturers all have plans to delay the shutdown of LCD panel production in the high era. LGD G7.5 production capacity is reserved, and it is possible to restart LCD TV panels at G8.5 in South Korea SDC retains a G8.5 generation line. The Korean factory's flexible adjustment of business strategies will enable SDC and LGD to still have a share in the LCD TV market in 2021.
Taiwanese factories have relatively stable performance, AUO focuses on high-end product positioning, and Innolux seeks differentiated competition and maximize profits, and product layout is relatively scattered.
TV panel shortages continue, and prices usher in the longest rising cycle
Looking back on 2020, there are many reasons for the tight supply of panel factories. ① The epidemic affected the climbing progress of the new line of panel factories, and the climbing capacity of Huike Mianyang G8.6 and BOE Wuhan G10.5 were not as good as expected. ② The transfer of the track of panel makers, the increase of IT/commercial display production capacity, and the further squeeze of LCD TV panel production capacity. ③ Although the Korean factory has delayed the closing time of its LCD production line, the actual supply has shrunk significantly. ④ The upstream material supply gap continues to exist, affecting the actual effective supply. According to statistics from Sigmaintell, in 2020, the global LCD TV panel production area will drop by 1% year-on-year, the first negative growth in the past 10 years. It is expected to recover significantly in 2021, and the production area is expected to increase by 6.6% year-on-year.
According to Sigmaintell's "supply and demand model" calculations, global LCD TV panels have been in short supply since the third quarter of 2020, driving panel prices to rebound from the bottom in June. And this wave of price rebound ushered in the longest and largest increase cycle in the past ten years. According to Sigmaintell's statistics and forecast data, as of December, LCD TV panel prices have increased by more than 60% on average, and the cumulative increase in main size is as follows: 32" The price rebounded most rapidly, with the increase doubled, 43"~55" The increase has exceeded 60%, and the increase of large size 65" and the more moderate increase has reached 40%.
The sharp increase in prices on the one hand has rapidly improved the operating conditions of panel factories and achieved a higher level of profitability. At the same time, it has formed a significant squeeze on the profits of complete machine manufacturers. The industry chain needs to be wary of excessive panel prices and terminal demand The inhibitory effect produced.
In recent years, technological innovation in the TV market has been relatively slow. Under the 2020 epidemic, the world economy has suffered setbacks, and the growth of high-end TV products such as 8K and OLED TVs is not as good as expected. Under the normal post-epidemic situation, the economy is slowly recovering. Sigmaintell believes that the overall market performance of high-end TV products is still not optimistic, especially the 8K track is affected by the withdrawal of LCD production capacity of Korean factories, which has an impact on the product strategy of leading brands. With a certain impact, it is expected that the penetration rate of 8K TV panels will not increase rapidly in the short term. However, the growth of OLED TVs and Mini LED-backlit TVs is still expected.
The OLED TV panel ecology welcomes tremendous changes. Firstly, LGD's supply capacity has grown, and products and technologies continue to be enriched; secondly, the panel supply pattern will gradually shift from exclusive supply to diversified supply, which is expected to promote healthy competition in the OLED TV industry, thereby accelerating the increase in penetration. According to statistics from Sigmaintell, 4.42 million OLED TV panels will be shipped in 2020, and the shipment performance is not as expected. It is expected to exceed 7 million in 2021, and the OLED track is expected to usher in accelerated growth.
Mini LED is advancing side by side in the two directions of self-luminous display and backlight technology. The application in the backlight solution effectively enhances the display quality performance through multi-zone precise light control. The ultra-thin body through 0 OD technology enables LCD products The life cycle continues in the high-end market. Under the leadership of the leading brand's active strategy, it is expected that the shipment of Mini LED backlight TVs in 2021 is expected to exceed 2 million units, and the next few years will usher in a period of rapid development.
2021, the adjustment year!
In 2021, the world will gradually enter the post-epidemic era. Will the expansionary fiscal and monetary policies of major powers continue? Can the risk of regional trade friction be alleviated? Will the consumption habits be changed after the popularization of vaccines... The global economic, political and demand situation remains complex and changeable. After undergoing mergers and acquisitions of panel makers in 2020, we believe that the global LCD TV panel industry will enter a post-merger adjustment year in 2021, and we expect panel makers to exert the effects of mergers and acquisitions. As the concentration of manufacturers increases, it is expected to lead the panel market order to become more rational and healthy, and drive panel price fluctuations to flatten.
In the complex environment, the TV panel display industry still faces many challenges. Several suggestions from Sigmaintell are as follows: 1. It is important to assess the situation and focus on the win-win situation of the industry chain. LCD TV panel prices have risen sharply in a relatively short period of time. If downstream brands and channel prices adjust slowly, it will have an impact on brand profitability; if downstream brands and channel prices adjust rapidly, terminal demand, especially the demand for low-end products, will fall risks of. Therefore, only a steady increase in prices can help promote a reasonable return to market prices and the sound development of the industrial chain.
2. Leading manufacturers should play a leading role and rationally plan product structure upgrades. Chinese panel manufacturers have become the absolute leaders in the LCD industry, and how to stabilize their business operations and market order in future market fluctuations are facing challenges. We believe that sound business strategies and product structure upgrades remain the top priority. Especially in terms of technology, we should pay more attention to technology iteration and tap the growth space of market segments, and strive to be a technology leader.
3. The supply chain risk management should be strengthened. The emergence of upstream material supply problems in 2020 has exposed the loopholes and risks of panel factories in supply chain management. How to establish a good cooperative relationship with suppliers in 2021 and how to reduce and respond to upstream supply risks are issues that all panel manufacturers have to think about and face in 2021.