Global TV shipments in 2023 suffered a 2.7 percent decrease, reaching 195 million units — a record low for the past decade, TrendForce research said.
As the industry gears up for the first quarter of 2024, traditionally marked by a slowdown in consumer product demand, global TV shipments are anticipated to plummet by 18.9 percent quarter-on-quarter to 43.28 million units. Despite this, there is a glimmer of hope for a marginal 0.3 percent annual increase, projecting a total of around 196 million units for the entire year.
The second quarter of 2024 is expected to witness TV panel prices soaring to levels comparable to last year’s peak, attributed to diminished production during the Lunar New Year and a constrained supply of COP (chlor-alkali process).
The supply chain is poised for disruption due to the shortened working days during the February Lunar New Year holiday and a COP supply crunch, prompting an early initiation of TV panel price hikes at the end of January. The impending Lunar New Year has prompted major panel manufacturers to curtail production in response to dwindling demand, resulting in a meager average monthly utilization rate of 59.2 percent.
This has, in turn, pushed the first-quarter average utilization rate of panel factories below the 70 percent mark. Despite the oversupply ratio narrowing from 3.9 percent in 4Q23 to 2.6 percent in 1Q24, a seismic event in Japan early this year has affected COP supplier ZEON’s factories, potentially impacting VA panel production by late February to March and triggering a potential surge in TV panel prices.
The demand for TV panels has experienced an upswing, particularly from North American distributors replenishing their inventories post last year’s promotions. The concerted effort by brands to stock up, fueled by upcoming events such as North American tax refunds, spring season model launches, sporting events, and the Amazon Prime Day shopping extravaganza, has led to a 6.3 percent increase in purchasing volumes in the first quarter compared to initial estimates. With market voices advocating for panel price hikes and the looming threat of insufficient panel production due to COP supply shortages, panel makers have strengthened their bargaining power since January.
Forecasts indicate that by February, the average price increase for TV panels under 50 inches is expected to reach a minimum of $1, $2 for 55 inches, and $2–3 for 65 inches, with further increases likely for out-of-stock models. Despite global geopolitical uncertainties and financial environment fluctuations, current TV panel prices are above cash costs. Although this wave of price hikes may not match the intensity of 2023, TV panel prices in the second quarter hold the potential to challenge last year’s highs.
In light of rising TV panel prices since last year, LG Display’s reintroduction of capacity from its Guangzhou 8.5-generation line at the end of last year has led to an oversupply. However, panel makers are expected to employ production control strategies to support the upward trajectory of TV panel prices, potentially benefiting IT panels as well.
Nevertheless, the recent trend of selling high-spec TV models at lower prices, with brands struggling to pass on the rise in panel costs to consumers, is expected to impact profitability and purchasing intentions in 2024. Conversely, if panel makers experience quarterly financial improvements and utilization rates exceed 80 percent, the second half of the year may witness a lackluster season and a possible decline in panel prices.
