Global TV shipments in 2023 down 2.7% YoY at 195 million units

Thursday, February 1st, 2024 
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Early Price Increase for TV Panels, with a Predicted Rise of US$2–3 for 65-Inch Models in February, Says TrendForce

TrendForce research indicates that global TV shipments in 2023 amounted to approximately 195 million units—a 2.7% YoY decrease, setting a new low for the past decade.

Looking ahead to the first quarter of 2024, which coincides with the traditional off-season for consumer products, global TV shipments are estimated to decrease by 18.9% QoQ to 43.28 million units. However, there is potential for a slight increase in annual shipments by 0.3%, reaching about 196 million units for the whole year.

TV panel prices in the second quarter may reach last year’s peak levels due to reduced production during the Lunar New Year and a tight COP supply

The supply side will be affected by the shortened number of working days during the Lunar New Year holiday in February and the tight supply of COP, leading to an early start for price increases of TV panels at the end of January. The imminent Lunar New Year has prompted many panel makers to reduce production in response to decreased demand—resulting in an average monthly utilization rate of just 59.2%—and pushing the first-quarter average utilization rate of panel factories below 70%.

The oversupply ratio narrowed from 3.9% in 4Q23 to 2.6% in 1Q24. Additionally, a major earthquake in Japan at the beginning of this year impacted COP supplier ZEON’s factories in Toyama Prefecture’s Himi and Fukui Prefecture’s Tsuruga. The damage to local water pipelines means they cannot be fully repaired in the short term, potentially affecting some VA panel production at the end of February to March, leading to a brewing price increase in the TV panel market.

Demand for TV panels has seen a boost, particularly from North American distributors who have been replenishing their inventories following the conclusion of last year’s promotional activities. Furthermore, since mid-January, there has been a concerted effort by brands to stock up in anticipation of a series of coming events. These include promotions tied to North American tax refunds, launches of new models for the spring season, sporting events, and the Amazon Prime Day shopping event.

These factors have driven TV panel demand in the first quarter, with purchasing volumes increasing by around 6.3% compared to our initial estimates. As the market voices for panel price increases strengthen and the risk of insufficient panel production due to COP supply shortage emerges, panel makers have regained bargaining power since January.

By February, the average price increase for TV panels under 50 inches is expected to reach at least $1, $2 for 55 inches, and $2–3 for 65 inches, with further increases possible for out-of-stock models. Despite the ongoing global geopolitical turmoil and the recovery of the financial environment introducing uncertainties, current TV panel prices are above cash costs. Although this wave of price increases may not be as strong as in 2023, TV panel prices in the second quarter still have the potential to challenge last year’s highs.

Panel makers will continue to focus on production control, putting the profitability of TV brand manufacturers to the test

Since TV panel prices began to rise last year, LG Display’s re-entry of capacity from its Guangzhou 8.5-generation line at the end of last year has led to an oversupply of TV panels. However, panel makers will continue to adopt a production control strategy to support rising TV panel prices, with IT panels also potentially benefiting.

Nonetheless, the recent trend in the TV end-market toward selling high-spec models at low prices, with brands unable to effectively reflect the rise in panel costs, will inevitably impact this year’s profitability and purchasing intentions. On the other hand, if panel makers’ financial conditions improve quarterly and utilization rates are pushed above 80%, the second half of the year may once again face a lackluster season and a potential decline in panel prices.

Links: TrendForce