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LCD Panel Price Resume Downward Trend 
May 06, 2019
 
LCD panel prices, in general, experienced a one-month reprieve in March but continued dropping in April. Most larger TV panel sizes increased although smaller TV panel sizes did increase.  Notebook, tablet and monitors, continued to decline, and have not had any ASP increases since the end of 2Q last year, while mobile phone panel pricing continues to drift lower. Monitor panel supply and demand remains a bit heavy on the supply side, with pressure from buyers toward lower prices and less desire to fill immediate quotas, but panel producers are selling smaller monitors right around cash costs, so there is little advantage for their production.  The CPU shortage that hindered IT product shipments in 1Q continues, which is also limiting demand, with back-to-school (August) the next inflection point.

TV panels remain mixed with smaller panels (<55”) rising a bit and larger panels falling.  The same concerns about potential shortages in smaller TV panels as Samsung shifts some LCD production to QD OLED remain but the slightly more optimistic view of TV panel pricing panel makers expected last month seems to be less optimistic currently, and the 2Q guidance is cautious at best.  While volumes picked up in March, as is seasonally typical, the aggregate value of large panel production in 1Q still declined on a Y/Y basis.  If overall TV panel prices continue to fall in May, as they did in April, and inventories remain at current levels, panel makers could lower utilization rates.  AU Optronicsreported a GM of 0.4% for 1Q, and the excess capacity will pressure margins in 2Q unless they can quickly shift to higher margin products. The capacity expansion in China, much of which was planned more than 24 months ago when the industry was seeing more stability in panel pricing, continues. From SCMR, LLC