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LCD TV panel inventory control to drag down demand

Posted: 22 Oct 2015     Print Version  Bookmark and Share

Keywords:IHS  LCD TV  panel demand  OLED 

IHS Inc. has revealed that LCD TV panel demand is seen to plunge three per cent in 2016 to reach only 257 million units. The drop is a result of TV brands' continual panel inventory control, as well as the volatile global economy.

Since 3Q14, the LCD TV panel industry has been going through a difficult time, with TV set makers adjusting panel inventories as well as their 2015 business plans downward.

"TV panel inventory adjustments will continue into 1H16, because more manufacturing capacity will be coming online, especially in China," said David Hsieh senior display director for IHS. "Global consumption is stagnant and the replacement cycle is slow, which will not support strong growth in the coming year."

According to IHS 134 million LCD TV panels were shipped in 1H15; however, although prices declined in H2, panel makers have maintained capacity utilisation to produce even more panels. At the same time, they have been quickly reducing panel prices to encourage TV brands to keep buying for their short-term needs and for the upcoming global holiday shopping seasons. "All of these factors will have a negative impact on LCD TV panel demand in 2016," Hsieh added.

LCD TV panel demand forecast

IHS stated that since 3Q14, the LCD TV panel industry has been going through a hard time, with TV set makers adjusting panel inventories as well as their 2015 business plans downward.

"Panel shipments have surpassed LCD TV set shipments by double digits for three consecutive years," Hsieh said. "TV brands are revising their business plans downward this year and continuing slow economic growth is creating more uncertainty in 2016, so TV makers are expected to be conservative in their 2016 planning."

While LCD TV panel unit shipments are forecast to decline in 2016, area demand will reach 125.9 million square meters, a three per cent increase from 2015. When OLED TV panel area is included, YoY area growth reaches four per cent.

Panel supply is growing in the 40in to 43in panel segment, and panel price decreases are helping larger sizes grab market shares from the traditional mainstream 32in segment. Unit shipments of 32in panels will fall from 90 million in 2014 and 2015 to less than 80 million in 2016. The 32in panel size is being threatened by 40in to 43in sizes; meanwhile, panel shipments of 50in to 55in sizes will grow from 37 million in 2015 to 41 million in 2016.

"The collapse of panel prices in 2H15 is encouraging panel makers to shift their product mix, because smaller panel sizes will experience deep losses," Hsieh said. "Panel makers will be spurred to produce larger panels, which are more profitable, rather than stick with smaller panels with deeply eroded profitability."

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