Taiwan Panel Sales & Shipments – May
In our 05-11-22 note we reviewed the results for the three Taiwanese LCD panel producers which were quite weak and while May sales results were up on a m/m basis for two of the three, y/y comparisons were quite poor. Of the three AU Optronics (2409.TT) fared the best, with sales of NT$21.97b ($744.0m US), up 8.7% m/m but down 31.6% y/y, while Innolux (3481.TT) saw sales of NT$18.01b ($610.02m US), down 12.6% m/m and down 42.6% y/y, and Hannstar (6116.TT) generated NT$1.60b ($54.32m US), up 15.6% m/m/ but down 43.1% y/y.
AU Optronics typically sees a m/m sales increase of 8.1% (5 yr. avg.), so this month’s performance seems in-line on that basis, although sales for the month are now only slightly above 2020 pandemic levels, which were the lowest since 2005, While AUO does not report large and small panel shipments, they do show shipment area (m2) for each month, which we convert into sales/m2, as seen in Figure 4, which peaked in July of last year, and has continued that m/m decline this year as panel prices declined.
Innolux fared the most poorly of the three, despite a continuing rebound in small panel shipments, although we expect the continued weakness seen in large panel pricing offsets the shipment gains in the small panel segment. Hannstar, which specializes in small panel production, saw a large jump in large panel units, but we note that these are small volumes relative to other producers and vary considerably based on orders, especially after the weakness seen earlier this year. After a poor April Hannstar is now seeing relatively steady small panel shipments, although pricing remains under pressure, and with the return of large panel shipments (IT panels most likely) was able to generate positive m/m performance in May.
Looking at the two large panel Taiwanese producers combined, sales saw a 2.07% decline, and while we cannot directly compare large panel shipment data for bot (AUO does not provide), we assume that the combined large panel shipments were roughly flat, leaving price as the basis for the sales decline. As we expect June will see additional panel price declines, we expect flat to weaker results for Taiwan panel producers this month. We do expect to see Chinese panel producers lower utilization rates again, although the increments have been small thus far, which could help to slow panel price declines, but we would not expect to see panel price stability until August when panel production for the holidays begins again. Much will depend on how much inventory Chinese panel producers were able to bring down by lowering utilization and how aggressive brands will be on maintaining inventory levels into the holidays, but we are still quite concerned that the lingering effects of COVID-19 lockdowns and the war in Ukraine, along with the rapidly increasing price of energy will temper production demand in 3Q.
Innolux fared the most poorly of the three, despite a continuing rebound in small panel shipments, although we expect the continued weakness seen in large panel pricing offsets the shipment gains in the small panel segment. Hannstar, which specializes in small panel production, saw a large jump in large panel units, but we note that these are small volumes relative to other producers and vary considerably based on orders, especially after the weakness seen earlier this year. After a poor April Hannstar is now seeing relatively steady small panel shipments, although pricing remains under pressure, and with the return of large panel shipments (IT panels most likely) was able to generate positive m/m performance in May.
Looking at the two large panel Taiwanese producers combined, sales saw a 2.07% decline, and while we cannot directly compare large panel shipment data for bot (AUO does not provide), we assume that the combined large panel shipments were roughly flat, leaving price as the basis for the sales decline. As we expect June will see additional panel price declines, we expect flat to weaker results for Taiwan panel producers this month. We do expect to see Chinese panel producers lower utilization rates again, although the increments have been small thus far, which could help to slow panel price declines, but we would not expect to see panel price stability until August when panel production for the holidays begins again. Much will depend on how much inventory Chinese panel producers were able to bring down by lowering utilization and how aggressive brands will be on maintaining inventory levels into the holidays, but we are still quite concerned that the lingering effects of COVID-19 lockdowns and the war in Ukraine, along with the rapidly increasing price of energy will temper production demand in 3Q.
AU Optronics - Monthly Sales - 2018 - 2022 YTD - Source: SCMR LLC, Company Data
Innolux - Monthly Sales - 2018 - 2022 YTD - Source: SCMR LLC, Company Data
- Hannstar - Monthly Sales - 2018 - 2022 YTD - Source: SCMR LLC, Company Data
AU Optronics - Sales Per M2 - Source: SCMR LLC, Company Data
Innolux Large & Small Panel Shipments - 2018 - 2022 YTD- Source: SCMR LLC, Company Data
Hannstar Large & Small Panel Shipments - 2018 - 2022 YTD - Source: SCMR LLC, Company Data
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