Musing on Displays
Large Panel Revenue Shows Start of Recovery—Up 2.1% Y/Y in May
June 29, 2020
Large panel revenue in May was up ~10.8% sequentially and up 2.1% Y/Y By application,
- TV panel sales were up 14.7%.
- Monitors units grew 9.1% sequentially and 18% Y/Y
- Notebooks grew 14.5% sequentially and 29.7% Y/Y.
- Small/medium panel sales, which are 14.2% of industry panel revenues were down over 20% sequentially and down almost 11% Y/Y.
On a company specific basis only CEC Panda, BOE and Innolux Y/Y growth in the small/medium panel space. While some slowing in monitor and notebook panel growth is expected in July/August, there is still strong demand for such panels and occasional component shortages on a worldwide basis.
Samsung Display and LG Display accelerated capacity reductions, but needed to build inventories to a higher level than in recent months to avoid being caught short heading into the holiday season. A more optimistic view of the consumer landscape from both South Korea and China (both with very few new COVID-19 cases recently) seems to have increased buyer confidence. From: SCMR, LLC
May’s panel pricing was relatively weak, particularly TV panel pricing (in the lower size panel), June TV panel pricing rose substantially TV panel buyers pulled in quotas from 3Q. Panel producers were caught a bit short, having reallocated capacity to monitors and notebook panel production earlier, and raised TV panel prices far more aggressively than expected.
- Smaller TV panels were up 6.2% while large TV panels were up 3.1% for an overall increase of 3.9% across all TV panel sizes.
- Monitors panel prices were up slightly (+0.2%)
- Notebook panel prices were up 0.3%.
- Tablet panel pricing was flat
- Smartphone display pricing was up 1.3%,
There was certainly a surge in US retail demand in May, causing TV set manufacturers to anticipate sustained increases in retail sales akin to the recoveries seen in other countries in the month following the reopening of businesses. Retail sales in June are increasing monthly, but getting back to pre-COVID levels or a pent up demand from sequestered consumers, could take until 2021. Notebook and monitor producers are a bit less sanguine about prospects for 2H given the strength in 1H, and perhaps the hope that the virus is on the wane, there is a weaker but steady demand curve, which should help to balance the steeper ups and downs of the TV space.