Gen 5+ LCD Panel Market Struggles to Keep Pace with Demand in 2023 as Panel Makers Prioritize Profitability

In 2023, the Gen 5+ LCD panel market is facing challenges in meeting the escalating demand due to rigorous production controls aimed at achieving profitability, according to a report by TrendForce. The supply-demand ratio for Gen 5+ LCD panels is predicted to be 2.1%, indicating a tight supply situation in the overall market, as suppliers focus on improving their financial standing.

TV sales suffered in 2022 due to high inflation and increased shipping costs for large-size TVs, leading to reduced panel demand and lower panel prices. In response, panel makers adjusted their business strategies and carried out significant capacity adjustments to expedite inventory turnover. As a result, the supply-demand ratio increased to 0.6% in the first quarter of 2023, still below the balanced range of 3%. The market remains in tight supply, setting the stage for potential increases in panel prices.

While there was a 13% QoQ growth in major glass production lines in the second quarter of 2023, stocking demand for various applications also surged by 13.6%, maintaining the supply-demand ratio at a steady 0.5%. As the supply remains under strain, LCD TV panel prices continue to remain stable, as they account for around 80% of the panel market capacity.

Panel makers are expected to ramp up production in the third quarter as financial pressures ease, but production control will persist until they achieve profitability. The supply-demand ratio is projected to rise to 3.3% in 3Q23, reaching a balanced range. The fourth quarter will be crucial for shipments, and to achieve profitability in a single quarter, panel makers may need to adjust their strict production control strategies in favor of pursuing profits, possibly pushing the supply-demand ratio to rise to 3.7%.

TrendForce highlights that the current supply-demand ratio for TV panels may not fully reflect the true market conditions, as it heavily depends on panel makers’ cautious production capacity control over the past year. The capacity utilization rate of panel makers and fluctuations in terminal sales in the second half of 2023 will be vital in determining market trends.

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