Oversupply in LCD panels in 2012

In China, local companies such as BOE Technology Group and Shenzhen China Star Optoelectronics Technology will begin to use the large-scale floor production line of the 7.5th generation (floor size 1950mm×2250mm) from the second half of 2011. To mass produce LCD panels. Signs of Taiwan’s AU Optronics (AUO) and Chimei Innolux, South Korea’s Samsung Electronics, LG Display, and Sharp, Japan’s “mass production in 2012” have also become Bright. In this regard, FPD industry insiders began to worry about the oversupply of LCD panels in 2012.

Oversupply in LCD panels in 2012

The supply and demand relationship of LCD panels has been in a state of “supply in short supply” and “balance of supply and demand” for more than a year from the spring of 2009 to the middle of 2010. However, DisplaySearch expects that by 2012, when a large number of production lines of domestic and foreign-owned enterprises will start mass production, the entire FPD industry will “fall into a supply surplus situation”.

In the global TV market, the share of CRT TVs replaced by LCD TVs is expected to decrease from 16% in 2010 to 6% in 2012. By 2012, the global TV market will almost no longer have CRT TVs for LCD TV replacement. The demand for LCD panels will depend on the growth rate of LCD TV itself, that is, TV sets. The growth rate of global TV sets has entered a stable period in developed countries, so it is necessary to be promoted by emerging market countries in the future.

This "dependence on emerging market countries" is likely to accelerate the development of LCD TVs and LCD panels in the direction of low prices with oversupply. DisplaySearch expects that the price of 32-inch HDTVs of less than $400 in 2010 will fall below $300 by 2012, and panel prices will be the same, from $200 in 2010 to less than $150.

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Figure 1: The supply and demand trend of LCD panels is quoted from the "19th DisplaySearch Forum" speech. The rise of Chinese manufacturers poses a threat to Japanese and Korean manufacturers.

The growth of LCD TV production in China stems from three points. The first is that the demand for LCD TVs in China tends to increase. In 2009, the proportion of domestic brands in China reached 80%. The second is that OEM (OEM) manufacturing for other brands in China is increasing. This momentum has been formed in 2010. The third is that Chinese TV brand manufacturers began to promote their own brands to the world. Among them, the share of Chinese TV brand manufacturers in emerging market countries tends to increase. With the oversupply of LCD panels in 2012, it will pose a huge threat to Japanese and Korean TV brand manufacturers.

In 2012, when there was an oversupply of LCD panels, it would bring about a low price of LCD panels and TVs, which would change the pattern of the FPD industry in the past. Just as Korean TV manufacturers have threatened Japanese TV manufacturers, Chinese TV manufacturers will also pose a threat to Japanese and Korean TV manufacturers. Moreover, large LCD panel manufacturers may take the opportunity of oversupply of LCD panels in 2012, and vigorously launch the OLED business that is recognized as "the new generation of tablet technology."

The latest analysis and forecast of the display industry will be detailed in the "19th DisplaySearch Forum" held on July 28-29.

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