November LCD Panel Pricing & 2021 Early Summary
November panel prices came in a bit worse than expected, continuing the downward trend seen over the last three months for most display types. While some had expected a more stable November and December, based on the data, the rate of decline increased for monitors and notebooks, with TV panel pricing declining at a lesser rate than October, but still at an extremely high monthly rate (-6.7%). Typical (5 year average) declines for TV panels in November have been -1.0% and +0.1% for December, with Monitors typically -1.0% and -0.7%, and Notebook typically +0.1% and +0.1% for the last two months of the year.
Most important for the TV space is where TV panel prices are relative to the highs and lows seen over the last two years, as many panel producers still have a large portion of their capacity allocated to such panels, representing a sizable chunk of sales dollars. While Fig. 1 gives some indication as to the TV panel price declines seen over the last few months (the thin line below each plot represents the low point), the table, particularly the column indicating the percentage remaining between the current price and the lowest TV panel price point, is the most critical, as many panel producers were operating at or below cash costs for such panels when those lows were set. Continued TV panel declines, even at a slower rate, would push TV panel production into the red for some producers. Details on how panel pricing has affected specific panel producers tomorrow.
From the perspective of TV set producers, TV panel price decreases are a godsend, although lower TV panel prices will take some time to filter through TV panel and set inventory. TV set demand should see a boost from lower set prices during the next few quarters but the specter of silicon component shortages still plays into volatility at that level. Consumers will have quite an array of different types of TV sets to choose from in 2022 and set brands will do everything possible to keep that product differentiation producing premium prices. With generic LCD, LCD with Quantum Dots, LCD with Mini-LEDs and Quantum Dots, OLED TV, and soon Quantum Dot/OLED sets, there will be considerable competition in the premium TV market. As always TV brands are expecting a boost in sales due to the 2022 Olympics (2/4/2022) and FIFA World Cup (11/21/2022), but there are a lot of moving parts to the TV market next year and fears over the new COVID-19 variant go toward continued uncertainty, which leads us to expect little change toward Chinese New Year (2/1/2022).
From the perspective of TV set producers, TV panel price decreases are a godsend, although lower TV panel prices will take some time to filter through TV panel and set inventory. TV set demand should see a boost from lower set prices during the next few quarters but the specter of silicon component shortages still plays into volatility at that level. Consumers will have quite an array of different types of TV sets to choose from in 2022 and set brands will do everything possible to keep that product differentiation producing premium prices. With generic LCD, LCD with Quantum Dots, LCD with Mini-LEDs and Quantum Dots, OLED TV, and soon Quantum Dot/OLED sets, there will be considerable competition in the premium TV market. As always TV brands are expecting a boost in sales due to the 2022 Olympics (2/4/2022) and FIFA World Cup (11/21/2022), but there are a lot of moving parts to the TV market next year and fears over the new COVID-19 variant go toward continued uncertainty, which leads us to expect little change toward Chinese New Year (2/1/2022).
TV Panel Pricing - 6/2018 - 2021 YTD - Source: SCMR LLC, IHS, Witsview, Company Data
On the positive side, IT products (Monitors, Notebooks, and Tablets) still remain substantially above lows, with all three panel categories within 15% of their peak panel prices. While TV panel prices are a sensitive point, the movement in IT panel prices is now the focus, given the dependence on those panel products as the major component of panel producer sales and profitability, and while the rate of change over the last three months has been moderate, Fig. 2 and Fig. 3 show the trend has turned negative for such panels. While the monthly declines are small compared to the TV declines seen over the last few months, it is essential that panel producers are able to offset the declines in TV panel prices with IT panel stability, or they will be facing a 2022 scenario that returns some to an unprofitable status.
Aggregate Monitor Panel Pricing - ROC - 6/2018 - 2021 YTD - Source: SCMR LLC, IHS, Witsview, Stone, Company Data
Aggregate Notebook Panel Pricing - ROC - 6/2018 - 2021 YTD - Source: SCMR LLC, IHS, Witsview, Stone, Company Data
Aggregate Monitor Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC. IHS, Company Data
Aggregate Notebook Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC. IHS, Company Data
Aggregate TV Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC. IHS, Company Data
Aggregate Tablet Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC. IHS, Company Data
Aggregate Mobile Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC. IHS, Company Data
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