Fun With Data – Panels In Pictures
Now that 2021 is behind us the data for what was an unusual year in the display space becomes available and allows us to paint a picture of how the year looked, how it compared to other years, and how individual panel producers fared. In Figure 1, we show large panel display revenue for the 2020 and 2021 years broken out by region. China is the region with the most growth, which comes as no surprise, with revenue growing 29.4% in 2020 and 45.5% in 2021 while Korea’s display revenue declined 8.1% in 2020 and 25.0% in 2021 as both Samsung Display (pvt) and LG Display (LPL) reduced their exposure to the large panel LCD display space. During 2020 the large panel display industry grew revenue by 5.4% and by 19.3% in 2021 and Figure 2 shows revenue share for both years.
Large Panel Display Revenue By Region - 2020 - 2021 - Source: SCMR LLC, OMDIA, Witsview, RUNTO, Company Data
- Large Panel Display Revenue Share By Region - 2020 - 2021 - Source: SCMR LLC, OMDIA, Witsview, RUNTO, Company Data
Year over year revenue growth was a big seller for panel producers in 2021, especially when compared to weak early 2020 large panel revenue, but those comparisons declined from the high point in February as shown in Figure 3. That said all regions save Korea saw y/y revenue growth over 25% in 2021 although declining toward year-end. In December large panel y/y revenue growth in Taiwan was 6.2%, 4.9% in Japan, and 22.1% in China (Korea remained negative), and while the 2022 January y/y comparison might be a relatively easy one, the comparisons, especially in 1H will likely be problematic.
Large Panel Display revenue By Region Y/Y - 2020 -2021 - Source: SCMR LLC, OMDIA, Witsview, Company Data
Looking at individual large panel providers China’s BOE (200725.CH) was the largest revenue generator in 2021, as it was for much of 2020, with LG Display the 2nd largest revenue contributor. While LG Display was intending to reduce its exposure to the large panel LCD space in 2021, large panel price increases slowed those plans until mid-year, and while LG Display and other producers with TV panel exposure shifted production away from TV panels when TV panel pries broke in July, the overall effect of those TV panel price declines can be seen in Figure 4 as the year progressed. In 3Q the offset to TV panel price declines was the stability (and increasing price) of IT panels, which continued to incentivize panel producers to shift more production away from TV panels and toward IT panels. While this helped to keep the effects of TV panel price declines somewhat in check, by the 4th quarter IT panel pricing began its decline, albeit at a slower pace, but it seems the die was set as IT panel price declines continued to gain momentum, which has also been the case in January (see below).
The issue remains as to whether the IT panel price declines can be slowed by limiting utilization rates, but that takes a coordinated effort that not all panel producers will agree is the right method, and coupled with slower IT device demand, we expect it will take a few months of further price declines to make some panel producers realize that the cost of lower utilization in the short-term is less than the cost of a protracted downturn in the panel industry, especially during the seasonally slow 1st quarter. Unless component and silicon cost increases begin to abate as overall CE demand slows, panel producers will have a difficult time passing on cost increases and will likely have to absorb much of those increases while prices decline, making for a relatively weak 1Q and possibly 1H. If some balance can be reached before the holiday build period, there is a chance that the display space could see some growth, but display producers will likely be back to a more ‘negotiable’ mindset by the end of 1Q, which could help to lower CE device pricing and stimulate at least some demand in the 2nd half. Still lots of unanswered questions about the CE space, but then it is still January…
The issue remains as to whether the IT panel price declines can be slowed by limiting utilization rates, but that takes a coordinated effort that not all panel producers will agree is the right method, and coupled with slower IT device demand, we expect it will take a few months of further price declines to make some panel producers realize that the cost of lower utilization in the short-term is less than the cost of a protracted downturn in the panel industry, especially during the seasonally slow 1st quarter. Unless component and silicon cost increases begin to abate as overall CE demand slows, panel producers will have a difficult time passing on cost increases and will likely have to absorb much of those increases while prices decline, making for a relatively weak 1Q and possibly 1H. If some balance can be reached before the holiday build period, there is a chance that the display space could see some growth, but display producers will likely be back to a more ‘negotiable’ mindset by the end of 1Q, which could help to lower CE device pricing and stimulate at least some demand in the 2nd half. Still lots of unanswered questions about the CE space, but then it is still January…
Large Panel Revenue By Provider - 2021 -2022 - Source: SCMR LLC, OMDIA, Witsview, RUNTO, Company Data
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