March Panel Pricing & Outlook
LCD panel pricing in March continued its downward slide but with IT panel pricing taking the biggest hit, down 4.7%, above the high end of our expectations. TV panel prices also declined 1.3%, which was a bit above our range but has passed, at least for now, the period of upper single digit monthly declines seen in 2H last year. As we have noted previously, panel producers shifted production away from LCD TV panels last year, given the rapid price declines and moved that capacity to IT panels (notebook, monitor, tablet), however as TV panel prices reached cash costs this year there was little incentive for panel producers to continue to offer TV panels at lower prices and TV panel pricing (Figure 4) and shipments Figure 5) began to level off.
IT panel shipments (Figure 6) began to decline at the beginning of this year as demand began to return to more normal levels and IT panel prices (Figure 1, Figure 2, Figure 3) also began to drop, and while few panel producers expected the same steep monthly price declines for LCD IT panels that had been seen for TV panels, the rate of monthly IT panel price declines has been increasing (Figure 7) and given the increased sensitivity to IT panel prices at panel producers (Figure 8), the effect on panel producer profitability is considerable.
Heading into 2Q, we expect April to see continued IT panel price declines and more moderate TV panel price declines. While large panel shipments are seasonal, with 2H averaging ~52.6% of full year shipments, panel pricing is not, so we have little cause to expect large panel pricing to change direction unless real demand changes. We believe that some of the demand seen for IT products last year was real demand that was a result of the global economy beginning to right itself as the COVID-19 pandemic began to abate, which leaves us to question what might stimulate demand for IT products this year, a more difficult question to answer.
While TV set demand on a long-term basis has not been growing rapidly, given the LCD panel price declines seen over the last eight months, TV set prices should reflect those declines, making LCD TV set prices more palatable to potential; buyers. That said, inflation, both for raw materials and for components, has wiped out a portion of that gain, so we see some TV set demand improvement throughout the year. IT products however are facing lower demand (other than seasonal), increased competition, and the same cost inflation that TV set brands face, while IT panel prices continue to decline. While as noted, the IT panel price declines have seen less negative momentum than was seen with TV panel prices, but given that most panel producers have concentrated their capacity toward IT panel production, that market will see increased competition as that capacity must be filled, even for less profitable prices.
IT panel shipments (Figure 6) began to decline at the beginning of this year as demand began to return to more normal levels and IT panel prices (Figure 1, Figure 2, Figure 3) also began to drop, and while few panel producers expected the same steep monthly price declines for LCD IT panels that had been seen for TV panels, the rate of monthly IT panel price declines has been increasing (Figure 7) and given the increased sensitivity to IT panel prices at panel producers (Figure 8), the effect on panel producer profitability is considerable.
Heading into 2Q, we expect April to see continued IT panel price declines and more moderate TV panel price declines. While large panel shipments are seasonal, with 2H averaging ~52.6% of full year shipments, panel pricing is not, so we have little cause to expect large panel pricing to change direction unless real demand changes. We believe that some of the demand seen for IT products last year was real demand that was a result of the global economy beginning to right itself as the COVID-19 pandemic began to abate, which leaves us to question what might stimulate demand for IT products this year, a more difficult question to answer.
While TV set demand on a long-term basis has not been growing rapidly, given the LCD panel price declines seen over the last eight months, TV set prices should reflect those declines, making LCD TV set prices more palatable to potential; buyers. That said, inflation, both for raw materials and for components, has wiped out a portion of that gain, so we see some TV set demand improvement throughout the year. IT products however are facing lower demand (other than seasonal), increased competition, and the same cost inflation that TV set brands face, while IT panel prices continue to decline. While as noted, the IT panel price declines have seen less negative momentum than was seen with TV panel prices, but given that most panel producers have concentrated their capacity toward IT panel production, that market will see increased competition as that capacity must be filled, even for less profitable prices.
Aggregate Monitor Panel Pricing & ROC - 2019 - 2022 - Source: SCMR LLC, IHS, Company Data
Aggregate Notebook Panel Pricing & ROC - Source: SCMR LLC, IHS, Company Data
Aggregate Tablet Panel Pricing & ROC - 2019 - 2022 - Source: SCMR LLC, IHS, Company Data
Aggregate TV Panel Pricing & ROC - 2019 - 2022 - Source: SCMR LLC, IHS, Company Data
TV PAnel Shipments - 2019 - 2022 YTD - Source: SCMR LLC, IHS, Witsview, Company Data
Notebook, Monitor,and Tablet Panel Shipments - 2019 - 2022 YTD - Source: SCMR LLC, IHS, Witsview, Company Data
- Aggregate Large Panel Pricing ROC by Category - 2021 - 2022 YTD - Source: SCMR LLC, OMDIA, Witsview, Stone Ptrs, Company Data
Aggregate Large Panel Pricing & Share - 2021 - 2022 YTD - Source: SCMR LLC, OMDIA, Witsview, Stone Ptrs, Company Data
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