According to the data of analysis agency omdia, the price of LCD TV panel continued to rise in August 2020. In the third quarter of 2020, the demand for LCD TV panels continued to be strong, but the supply capacity was limited.

Panel manufacturers successfully raised panel prices in July 2020, and TV brands have accepted the fact that panel prices have increased. This successful attempt triggered panel manufacturers to continue to raise panel prices in August. Therefore, the price of LCD TV panel continues to rise in August 2020, with a month on month increase of about 8-10%. The panel size covers the popular sizes of 32, 43, 50 and 55 inch LCD TV panels. Large LCD panels also showed an upward trend, but the increase was slightly lower than that of small and medium-sized ones. For example, the price increase of 65 inch LCD TV panels was 4-5%.

According to the analysis of omdia, the demand for LCD TV panels in the third quarter of 2020 is expected to increase by 25-30% quarter on quarter. In the future, panel factories will transfer more production capacity to the production of it panels rather than TV panels. Omdia predicts that in 2021, about 120000 pieces of generation 8.5 capacity will be transferred from TV panels to other IT products every month.

In addition, the planned capacity exit time of Korean panel manufacturers is getting closer and closer. LG display is expected to close its Korean LCD TV panel factory by the end of this year. Samsung display plans to close its LCD panel plant by mid December 2020. The strong demand for LCD panels may prolong the operation time of Korean LCD TV panel factory for several weeks. Panel manufacturers said that the demand for LCD TV panels in the third quarter of this year was 115-130% higher than the planned capacity.

Earlier, panel manufacturers were worried that the demand in the fourth quarter of 2020 might suddenly decline. The rising capacity demand in August this year made them more confident in the demand in the fourth quarter of 2020. Some panel makers, especially the Chinese mainland panel makers, insist that the strong demand for LCD TV panels will last until the four quarter of 2020.

Omdia predicts that due to the obvious strong demand in the third quarter of 2020, the demand for LCD TV panels in the fourth quarter of 2020 should be slightly weaker than that in the third quarter. On the other hand, it is expected that the demand in the fourth quarter of 2020 may not be worse than that in the fourth quarter of 2019.

In addition, because the panel manufacturers aim to turn losses into profits in the LCD TV panel business in August 2020 and the whole third quarter, they will continue to increase the panel price.

However, the rapid rise in the price of TV panels will lead to changes in the market share of TV manufacturers. In the second half of 2020, the demand for LCD TV is quite strong. Retailers require to sell more goods to fill the inventory, but retailers are unable to raise the price of LCD TV. Therefore, smaller TV brands and OEM manufacturers will shrink production and further shrink market share due to the weak financial situation. The first-line brands have the opportunity to expand market share by virtue of strong brand power and supply chain management (SCM).

First tier brands have the ability to suspend raising the sales price of LCD TV sets, while OEMs and smaller TV manufacturers need to raise the price to maintain operation without loss. Under the same machine sales price, first-line brands will gain more sales and market share.

Omedia predicts that the rapid rise in the price of LCD TV panels in the third quarter of 2020 will cause strong price pressure on LCD TV brands in the fourth quarter of 2020.

However, the market also has some concerns about the demand and price of LCD TV panels in the fourth quarter of 2020. First of all, the sales volume of LCD TV in the first half of 2020 exceeded expectations, resulting in great expectations for the demand in the second half of 2020. Secondly, the demand in the second half of 2020 may be delayed to the first half of 2021. In addition, LCD TV panel purchasers were subject to soaring panel prices and poor profit margins in the third quarter of 2020. Some TV brands, especially second-line and smaller TV brands, give up buying LCD TV panels because the price is too high. In addition, some TV brands tend not to participate in TV promotions in order to control costs. These measures may affect the actual sales of LCD TV in the second half of 2020.

Omdia predicts that after the peak in the third quarter of 2020, the demand starts to slow down in the fourth quarter. Under the background that LCD TV brands strongly demand to reduce the panel price, the LCD TV panel price is likely to decline.

It is expected that the supply-demand relationship of LCD TV panel in 2021 will be more tense than that in 2020. With the withdrawal of Korean LCD manufacturers, the demand for LCD TV is expected to recover in 2021, but the supply of LCD TV panels is likely to decrease again. Therefore, the price of LCD TV panel will rise again, and the cycle will start at the beginning of the second quarter of 2021 and run through 2021.