September Panel Pricing
As we head into 4Q, panel pricing becomes even more competitive than normal. Brands are trying to decipher consumer buying patterns for the upcoming holidays, both Chinese and global, while panel producers are desperate to keep panel prices steady to avoid ending the year with a loss quarter. This not only leads to intensified competition among panel producers, but to more subtle pricing pressure as OLED and LCD compete against each other. Typically this leads to high panel price volatility in August/September and then three relatively benign months in 4Q, however this year the August/September price volatility did not occur, which leads us to believe we will see higher price volatility than normal in 4Q. This is an even more likely scenario given the steep utilization cuts that we highlighted in yesterday’s note.
We expect TV panel pricing to be the most volatile of the five categories (including mobile), with our expectation for a decline of between 1.5% and 2.3% in October. Given that TV panels make up 30.2% of total panel unit shipments and ~49% of the value of all panel shipments each month, TV panel price movements will be the driver for overall panel pricing in October and likely through the end of the year, with much resting on how effective the utilization cuts at Chinese panel producers prove to be at maintaining stable TV panel prices,
We expect TV panel pricing to be the most volatile of the five categories (including mobile), with our expectation for a decline of between 1.5% and 2.3% in October. Given that TV panels make up 30.2% of total panel unit shipments and ~49% of the value of all panel shipments each month, TV panel price movements will be the driver for overall panel pricing in October and likely through the end of the year, with much resting on how effective the utilization cuts at Chinese panel producers prove to be at maintaining stable TV panel prices,
Figure 1 - Aggregate Total LCD Panel Pricing - 2018 - 2025 YTD - Source: SCMR LLC, OMDIA, RUNTO, Witsview, Company Data
Figure 2 - Aggregate Panel Pricing for TV, Monitor, Notebook, Mobile and Tablet Panels – 2019 – 2025 YTD – Source: SCMR LLC, OMDIA, RUNTO, Trendforce, Company Data
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