Panel Pricing – 2021 Summary+
Overall aggregate panel prices declined 4.4% in December, with large panel prices down 4.4% and small panel prices flat. TV panel prices dropped 8.1%, more than our -6.7% expectations, while IT panel prices dropped 2.0%, with monitors and notebooks falling more than expected and tablets in line with expectations. For the full year 2021, monitor panel prices increased by 36.3% and finished the year 4.6% off of the high (September), while notebook panel pricing finished 2021 up 23.5%, only 2.0% off of the high (also September), while TV panels saw the opposite, declining 28.0% for the year, finishing down 45.3% from the high (July) and at the low for the year. Tablet panel pricing was up 3.2% for the year and down 9.3% from its high (July/August) and mobile panel prices were down 0.5% for the year and down 5.2% from the high, which was reached a number of times during the year.
Aggregate large panel prices, which include all categories other than mobile, declined 2.2% for the year, down 25.4% from the peak, but much of that decline is from TV panels, which ended the year representing 38.6% of aggregate large panel prices, although the average share for TV panel prices was 48.8% for the full 2021 year, pointing to the steep drop for prices in that category. Our expectations for January are for a ~3.0% decline in large panel prices, led by a 5.5% decline in TV panel prices, a 1.9% drop in monitor panel prices, a 1.0% drop in notebook prices, and a 1.7% drop in tablet panel prices. Utilization rates will likely drop in January/February, both for yearly maintenance and the Chinese New Year holiday (Feb. 1), while component shortages continue. This colors our expectations for January a bit as supply is reduced but demand has also diminished.
TV panel pricing is now only 18.0% from the 3 year low, which puts significant pressure on TV panel produces to maintain TV panel pricing before it reaches cash cost levels, and we expect the shift from TV panel production to IT panel production to continue into 2022. Thus far those reductions have done little to keep TV panel prices from falling and new large panel LCD capacity at Chinese panel producers will likely be oriented toward IT panel production, so there is a point at which TV panel prices will stabilize, but a continuation of the shift to IT panel production will then carry an increasing risk of competitive panel pricing, which could erode panel profitability without increasing IT demand. There are pockets of increasing demand in the IT space, such as enterprise notebooks, but much of that demand was driven by expectations of a return to the workplace for many employees. With the outbreak of the Omicron COVID variant, those plans seem to be shifting away from a return to full-time office work for many businesses.
Aggregate large panel prices, which include all categories other than mobile, declined 2.2% for the year, down 25.4% from the peak, but much of that decline is from TV panels, which ended the year representing 38.6% of aggregate large panel prices, although the average share for TV panel prices was 48.8% for the full 2021 year, pointing to the steep drop for prices in that category. Our expectations for January are for a ~3.0% decline in large panel prices, led by a 5.5% decline in TV panel prices, a 1.9% drop in monitor panel prices, a 1.0% drop in notebook prices, and a 1.7% drop in tablet panel prices. Utilization rates will likely drop in January/February, both for yearly maintenance and the Chinese New Year holiday (Feb. 1), while component shortages continue. This colors our expectations for January a bit as supply is reduced but demand has also diminished.
TV panel pricing is now only 18.0% from the 3 year low, which puts significant pressure on TV panel produces to maintain TV panel pricing before it reaches cash cost levels, and we expect the shift from TV panel production to IT panel production to continue into 2022. Thus far those reductions have done little to keep TV panel prices from falling and new large panel LCD capacity at Chinese panel producers will likely be oriented toward IT panel production, so there is a point at which TV panel prices will stabilize, but a continuation of the shift to IT panel production will then carry an increasing risk of competitive panel pricing, which could erode panel profitability without increasing IT demand. There are pockets of increasing demand in the IT space, such as enterprise notebooks, but much of that demand was driven by expectations of a return to the workplace for many employees. With the outbreak of the Omicron COVID variant, those plans seem to be shifting away from a return to full-time office work for many businesses.
Aggregate Monitor Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC, IHS, Company Data
Aggregate Notebook Panel Pricing & ROC - 2019 - 2021 - Source: SCMR LLC, IHS, Witsview, 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, Witsview
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