Are We Too Optimistic?

Are We Too Optimistic?
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Along with most of the industry, we have underestimated large panel price increases in both the 2020 2nd half and the first half of this year, with price increases far above the norm and panel prices far above historic levels.  Panel producers continue to be optimistic about most segments of the large panel space, with some seeing orders out to the end of the year.  That said, with a few exceptions, we get the feeling that large panel prices, in particular TV panels, might be seeing less momentum going forward.  We expect that weak TV sales in China and a slowing of TV demand in the US will take some steam out of the TV panel market and temper TV panel price increases as we head into the 2nd half, and higher cost panel inventory will take their toll on TV set sales, limiting TV brands ability to discount into the holiday season.
This leads us to reduce our expectations for TV panel prices in June from an increase of 5.2% to an increase of 3.6%, with smaller panels seeing less of an increase than larger panels. There is the continuing specter of component shortages that can continue to put upward pressure on large panel prices, but from a demand standpoint we expect it will be more difficult for panel producers to continue to raise prices as aggressively as they have in the past few quarters..  We will follow up with more data  as to where we expect large panel prices to wind up over the next few months next week, but in the interim we feel we needed to bring down large panel price increase expectations a bit.

TV Panel Pricing - M/M ROC - Source: SCMR LLC, IHS, Witsview, Company Data