The supply and demand pattern of LCD panels continues to improve, and the LCD panel industry may enter a harvest period

Recently, the panel market has continued to be hot, and the short-term leader Rainbow shares strongly won the seven-linked board. TCL Technology also set a record high share price in the intraday market, and received financing for 5 consecutive days. Since the beginning of this year, the panel industry's share price has been up and down. After the beginning of the year, it continued to weaken, and then broke through again in July and September, and then strengthened again at the end of the year. Can the high profits of the leading manufacturers continue?

Wanlian Securities organizes the data knowledge map display of Tonglian. Flat panel display technology (FPD) mainly includes display technologies such as liquid crystal display (LCD), plasma display (PDP), and organic light emitting diode display (OLED). At present, the LCD market accounts for about 65%, the OLED market accounts for about 28%, and the laser display market accounts for about 6%. Other display technologies are basically in the early stage of development.

From the supply side, public information shows that Samsung Display is expected to close its LCD production line in March 2021, and LGD plans to shut down South Korea’s local LCD TV panel production line by the end of 2021. The exit capacity is expected to account for 13.2% of the world’s total. The launch of new domestic production lines is coming to an end. Only the two new production lines of Huaxing Optoelectronics and Huike in 2021 and the new production line of Leybold High-Tech in 2022 will have limited new capacity, which may lead to short supply.

On the demand side, in 2019, the global market share of mainland Chinese manufacturers reached 42.3%, making them the world's largest panel manufacturing base. According to data from Tonglian, the shipment of large-size LCD panels in the second quarter of 2020 was 219 million, an increase of 26% from the previous month. Tablet computers, notebook computers and display panels led the shipment growth. From July to October, data shows that large-size TFT LCD panels for tablets, notebooks, and monitors still maintained their high shipments in the past five years, and the year-on-year data was significantly higher than in 2019.

The chairman of BOE once summarized the "Wang's Law", that is, "the price of standard panel products will drop by 50% every three years."

Entering November, LCD panel prices continued to rise across the board. For LCD TV panels, the price of 32-inch LCD TV panels in November was US$61.0/piece, an increase of 8.93% month-on-month; the price of 43-inch LCD TV panels was US$106.0/piece, an increase of 9.28% month-on-month; the price of 55-inch LCD TV panels was US$170.0/piece, an increase of 9.68% month-on-month.

In general, the supply and demand pattern continues to improve, pushing up pricing in the secondary market, and the industry may enter a harvest period.