Panel Pricing Paralysis
December saw relatively little change in panel prices. TV panel pricing (↑0.2%) and mobile panel pricing (↓0.6%) were the only categories that saw any movement, and we expect little change in January as much of the CE space is waiting to see whether President Trump makes substantial changes in the US import tariff levels. Additionally, as Chinese New Year comes relatively early (Jan. 29) this year. Production demand for holiday inventory is mostly complete.
Looking at our final 2024 pricing statistics, while there were some large monthly price swings[1], primarily in TV panel prices (see Figure 1), but in total, panel prices were relatively stable, particularly toward the end of the year. Panel producers, for the most part, acted rationally, however less so in the TV panel segment, where the desire for higher prices relatively early in the year, without strong consumer demand, caused an inventory issue that required panel producers to cut utilization rates in 3Q. Given that Chinese panel producers control a majority of the large panel LCD market, the onus falls on them for the large positive swing in March and the negative one in August, and given that the upward push in large panel prices was not driven by demand, it was inevitable that it was unsustainable. By the end of the year TV panel prices were up only 2.0% y/y.
It is difficult to predict how panel prices will move in the 1st and possibly the 2nd quarters of this year as the potential for tariff changes that will affect demand in the US for CE products is, at this point, a bigger factor than the outlook for general CE product demand in the US. With only two LCD large panel producers outside of China, onerous tariffs on TV sets will determine whether Chinese panel producers will be profitable this year, and we expect they will have little choice but to raise set prices to offset additional tariffs. Consumers will see those landed price increases as inflationary, making it difficult to justify replacement cycle purchases, but the scale of the potential tariff changes is really the key as margins on LCD panels, particularly from Chinese producers are quite thin. Its just a waiting game until the big man makes up his mind.
[1] Figure 1 zeros all panel prices at the end of 2023 and shows the relative m/m movements in each type of panel
It is difficult to predict how panel prices will move in the 1st and possibly the 2nd quarters of this year as the potential for tariff changes that will affect demand in the US for CE products is, at this point, a bigger factor than the outlook for general CE product demand in the US. With only two LCD large panel producers outside of China, onerous tariffs on TV sets will determine whether Chinese panel producers will be profitable this year, and we expect they will have little choice but to raise set prices to offset additional tariffs. Consumers will see those landed price increases as inflationary, making it difficult to justify replacement cycle purchases, but the scale of the potential tariff changes is really the key as margins on LCD panels, particularly from Chinese producers are quite thin. Its just a waiting game until the big man makes up his mind.
[1] Figure 1 zeros all panel prices at the end of 2023 and shows the relative m/m movements in each type of panel
Figure 1 - 2024 Panel Price Relative ROC by Type - Source: SCMR LLC, OMDIA, Trendforce, RUNTO
Figure 2 - 2024 Aggregate Panel Pricing by Type - Source: SCMR LLC, OMDIA, Trendforce, RUNTO
Figure 2 - 2024 Aggregate Panel Pricing by Type - Source: SCMR LLC, OMDIA, Trendforce, RUNTO
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