TV panel prices have experienced a notable uptick since February, coinciding with China’s 618 Shopping Festival stock-up period.
In addition, North America’s anticipated 3-4 percent growth in TV sales for the year prompted brands to accelerate shipments, aimed at reducing overall manufacturing costs. This strategic move fueled a remarkable 7.6 percent growth in TV shipments during the second quarter of 2023, contributing to an annual growth rate of 2.1 percent. However, the first half of 2023 witnessed a global TV shipment total of 90.4 million units, which represented a 3.5 percent year-on-year decline, according to data from TrendForce research.
TrendForce’s recent findings reveal that panel manufacturers have deliberately maintained the surge in TV panel prices by controlling production as the third quarter approached. In contrast, despite their efforts to maintain sales momentum, brands have struggled to pass on increased panel costs to consumers through retail price hikes. This delicate balance has placed many brands in a precarious financial position for the third quarter. Notably, as international brands ramp up shipments in preparation for year-end celebrations and China’s Double 11 shopping festival, which peaks at the end of September, an 11.9 percent increase in TV shipments for the third quarter is anticipated, amounting to approximately 52.24 million units. However, this figure falls 1.3 percent short of TrendForce’s initial estimates.
The persistent escalation of panel prices in the second half of 2023 is poised to force brands to streamline their less profitable product lines. As a result, the projected global TV shipment forecast for the entire year has been revised downward to 198 million units, reflecting a 1.5 percent year-on-year decrease.
Challenges in TV Panel Prices Propel Brands to Reevaluate Strategies
Panel makers have strategically adjusted production to stabilize costs and improve their financial positions throughout this year. Following the Chinese New Year festivities, Chinese brands significantly increased their procurement of TV panels, resulting in sustained price growth over recent months. By the end of June, panels sized 55 inches and below had reached a profitable price threshold. Looking ahead to the third quarter, panel sizes of 65 and 75 inches, primarily produced on the 10.5-generation line, are also expected to reach profitability. Prices for panels of 50, 55, and 65 inches are projected to surge by over 50 percent this year. However, in regions like North America, retail prices for these brands have not kept pace, and in some cases, have even decreased, putting pressure on brands’ profit margins.
TrendForce’s insights indicate that major TV brands are aiming for a seasonal 6.8 percent growth in panel purchases for the third quarter, a figure noticeably lower than their initial projections. Looking ahead to the fourth quarter, with peak panel procurement expected in September, a further 7.3 percent reduction in purchases is anticipated. Consequently, meticulous production control remains crucial for maintaining TV panel prices in the foreseeable future.
Challenges in High-End Market Demand Impact OLED and 8K TV Shipments
As the global economic outlook for the second half of 2023 remains uncertain, demand for high-end products, including OLED and 8K TVs, has faced challenges. Shipments for both OLED and 8K TVs have experienced declines. Specifically, OLED TV shipments are forecasted to reach 5.44 million units, reflecting a 19.3 percent year-on-year decrease. Despite leading the OLED TV shipment race, LG Electronics has seen a contraction in market share to 53.6 percent. Meanwhile, Samsung Electronics has surged ahead, surpassing SONY to claim second place with a projected market share of around 17.1 percent. SONY, focused on mid-to-high-tier models in recent years, is encountering difficulties in both LCD and OLED TV shipments, with its OLED TV market share expected to shrink to 15.1 percent.
8K TVs, facing challenges related to content availability and high pricing, are set to experience a significant 25.4 percent year-on-year plunge in shipments, reaching a modest total of 300,000 units. The shifting market dynamics are compelling manufacturers and brands to adapt to these changes, reevaluate strategies, and navigate the evolving landscape.
