LCD Panel Demand Slumps, Hisense & TCL To Cut Orders By 30%

As TV manufacturing processes continue to evolve and innovate, recent reports reveal that LCD panel orders are expected to drop, with six of China’s top TV manufacturers forecast to cut their volume orders by 30% in the first quarter of 2018.

According to Taiwanese trade publication, DigiTimes, ChangHong, Haier, Hisense, Konka, Skyworth and TCL are forecast to decrease their LCD panel purchasing volumes by a third in the first quarter of 2018, and 5% on year.

Deborah Yang, Director of Display Supply Chain at IHS Markit claims that many Chinese display panel manufacturers are yet to prove they can start mass-producing 65-inch LCD panels from the world’s first 10.5G fabs, during Q1Y18.

Yang also affirms that many premium brands are focused on ‘ultra-large’ panels:

“Due to a coming slow season, the bargaining power seems to be with TV makers. However, uncertainties about a stable supply of feature-rich premium and larger panels will have the top-tier TV brands concerned”

“The top-tier TV brands will want to make sure they can secure sufficient panel supplies of 65-inch and larger panels. At the same time, they also seek to attain better bargains on large and ultra-large panels in 2018 and beyond”.

IHS Markit states that LCD panel demand from South Korean and Chinese TV manufacturers was strong in the first quarter of 2017, but implementing their product strategies in the first quarter of 2018 may require adjustment, as overall demand changes.

South Korean TV makers are expected to drop their LCD panel purchasing volumes by 3% in the first quarter of this year.

Yang states that additional supply may result in additional bargaining power for TV makers to acquire further LCD panels:

“There is risk of a correction in demand as their panel purchasing plans get underway given that a sufficient supply chain buffer is already factored in for the first quarter. These manufacturers will likely continue to use their plans as a negotiating tactic for more competitive prices”

“This has been one of the most critical swing factors for the LCD panel supply and demand”.