According to the “TrendForce” WeChat official account, the research shows that the demand after the epidemic has slowed down significantly, coupled with the continuous release of new production capacity, resulting in an imbalance between supply and demand in the panel market. In the second half of the year, the utilization rate of production lines will be lowered to below 70% in order to effectively eliminate inventory. ( Note: “Utilization rate” is called activation or utilization in English, which refers to the proportion of time that equipment takes to create value within the time it can provide.)
According to TrendForce, with the demand for TV panels recovering recently, coupled with the rise in TV quotations, it is estimated that the utilization rate (in terms of area) of LCD production lines above Gen5 (including) in the second quarter will rebound to 77%. However, The actual output area still decreased significantly compared with the same period last year after LG Display closed its P6, P7 and Guangzhou LCD production lines.
The current recovery of panel makers’ utilization rate is due to actual order demand. Therefore, TrendForce believes that the supply-demand ratio of the LCD market in the second quarter should remain at a healthy level due to the recovery of the utilization rate. Panel makers will still need Maintain prudent control and quick response strategies to maintain market balance.
From the perspective of each generation line, the TV panel inventory of panel makers has returned to a healthy level after more than half a year of production adjustments. In the first quarter of this year, Chinese brand manufacturers started stocking up for the May 1st and 618 promotional schedules ahead of schedule, which not only drove demand back up, but also pushed up TV panel quotations and rebounded ahead of schedule. The upward trend in prices remained unchanged in the second quarter. TrendForce predicts that more than 90% of the production capacity is used for Gen10.x production lines, which mainly produce TV panels, and the production line utilization rate will increase by more than 10 percentage points from the first quarter, reaching 83.2%.
As for the Gen8.x production line, due to the booming demand for LCD monitors and notebook panels during the epidemic, most panel makers have shifted the TV production capacity of the production line to the production of IT projects at that time, although the recovery of TV panel demand will also help Gen8. The utilization rate of .x has rebounded, but due to the lack of a significant increase in demand for IT products, the utilization rate has only increased by 7.6 percentage points from the first quarter to 79.4%; in terms of production lines below Gen7.5 (inclusive), the maintenance of mobile phone panels Driven by the warming market demand and the increase in demand for some IT panels compared to the first quarter, it is estimated that the utilization rate will rise to 69%, and its growth rate is still viewed conservatively.
