More on April Panel Results
As we have noted in the past, panel demand and consequently panel pricing was extremely weak in the 1st half of 2016. This makes 2017 y/y comparisons a bit less relevant, as the gains will be greater than normal until 2H 2017. It can be seen in Fig. 1 how the comparisons turn positive starting in September of 2016, and have remained so thus far. The sustainability of these positive y/y comparisons is called into question as we enter the 2nd half of 2017, with September the 1st y/y comparison against more normalized results.
Our expectations for a weaker April were correct, but panel prices for all but TV panels have begun to decline, which could trigger panel buyers to jump back into the market after working down inventory in April. That said, this is not a foregone conclusion, as buyers tend to play the trend and could hold off another month to see if prices decline further. We note that m/m results do follow seasonal patterns, which would lead to the assumption that May’s results should be up from April on a normalized basis using that metric, and follow a similar pattern for the remainder of the year, unless brands begin to lower unit volume expectations for the year, in which case it would take another month of inventory selling to reach new target levels. All in, we would still expect May to be up on a m/m basis.
Our expectations for a weaker April were correct, but panel prices for all but TV panels have begun to decline, which could trigger panel buyers to jump back into the market after working down inventory in April. That said, this is not a foregone conclusion, as buyers tend to play the trend and could hold off another month to see if prices decline further. We note that m/m results do follow seasonal patterns, which would lead to the assumption that May’s results should be up from April on a normalized basis using that metric, and follow a similar pattern for the remainder of the year, unless brands begin to lower unit volume expectations for the year, in which case it would take another month of inventory selling to reach new target levels. All in, we would still expect May to be up on a m/m basis.
Figure 1 - Total Display TFT Revenue y/y - Source: SCMR LLC, Displaysearch, IHS, Witsview
Figure 2 - Total Display TFT Revenue - m/m - Source: SCMR LLC, Displaysearch, IHS, Witsview
Table 1 Display Device Unit Volumes - April 2017 - Source: SCMR LLC, Displaysearch, IHS
Table 2 - April Panel Producer Sales and Growth - Source: SCMR LLC, Displaysearch, IHS
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