As the end of the year approaches, the focus of the industry chain has recently been on the rebound of TV panel prices. After panel prices fell below the cash cost line, panel factories have been experiencing sustained significant losses. Therefore, with the arrival of the year-end promotion period, panel factories have put forward a demand for a significant increase in panel prices to reduce their own losses. However, brand factories are cautious in their expectations of terminal demand, resisting significant price increases, and are anxious in price games.

The current situation of panel factories is difficult, with huge losses, putting them in a dilemma of producing less to minimize losses, or accelerating the exit of production capacity. The basic plan for panel factories in 2023 has been finalized, which reveals that the industry landscape is about to undergo another reshuffle. Every huge reshuffle in the industry will lay the groundwork for the transformation of panel supply and demand.

Firstly, Korean panel factory LGD has clarified its exit plan. P7 factory will stop production by the end of this year and completely exit the market. Guangzhou factory plans to reduce production to 100K from January 2023, resulting in a significant decrease in production volume. Therefore, the overall LCD TV panel shipment plan of LGD will be reduced from 17M in 2022 to 7M in 2023, which will bring significant market supply gaps. The shipment plan for WOLED TV panels is 7.5M.

After the closure of SDC's remaining LCD production line in June this year, it has been slowly shipping and gradually consuming the remaining inventory. According to Samsung Electronics' demand, the remaining inventory will be delayed until 2023. Under the full production status of QD OLED in 2023, the shipment plan is 1.4M.

Sharp, the only remaining Japanese TV panel manufacturer, is facing huge losses, with Sakai G10 in Japan and SIO G10.5 in Guangzhou, China having significantly reduced their film production. Due to continuous losses and high inventory pressure, Sakai G10 has suspended production since July this year and has been operating at an extremely low turnover rate to consume previous inventory. However, facing customer loss, the production line plans to shift from TV to NB and PID products by the end of this year. In the absence of a significant rebound in panel prices, this production line still has huge losses and there is almost no hope of a significant resumption of film production. However, its Guangzhou factory currently has a crop turnover rate of only 50-60%, and this production line has been trying to increase the number of pieces put into production, but is facing significant pressure of losses. The Sharp TV panel shipment plan for 2023 is 15M.

The Taiwan based panel factory AUO is currently operating at a rate of less than 50%, and the TV product structure is gradually abandoning the mid to low end market and sticking to the high-end market. The size structure of INX TV is mainly small and medium-sized, and currently maintains a high operating rate. In the face of continuous losses, Taiwanese panel manufacturers may continue to shrink their TV production capacity. The shipment plans for INX and AUO in 2023 are 35M and 14M, but considering the pressure of subsequent operations, there is still great uncertainty about whether these two panel factories can achieve this shipment plan in 2023.

In the case of continuous losses in the whole industry, the "blood bar" length of each panel factory is particularly tested. Panel factories in Chinese Mainland have lower cost advantages and enjoy huge government subsidies to show their advantages in the competition. The overall TV panel shipment scale will remain expanding in 2023.

However, due to its thin product line, CEC Panda may be the first to withdraw from this test. As early as August this year, CEC had informed customers of its plan to suspend production of 38.5 inches in 2023 and made a final decision by the end of December this year. Based on the current market conditions, the suspension of production in 2023 is firmly established.

BOE currently ranks first in the industry with an absolute advantage. Due to the lack of new production lines and pressure to ramp up, under cautious market expectations, the BOE TV panel shipment plan for 2023 is almost the same as that for 2022, with a focus on making large-sized panels to consume production capacity.

CSOT has to maintain its expansion trend in 2023, as there is pressure to ramp up the Guangzhou T9 new production line. According to the plan, it will ramp up to 90K large boards in Q3 2023. This production line was originally planned to produce high-end IT products, but it still needs to consume production capacity through TV panels. 50 inch panels have already been mass-produced in October this year, and it is planned to start mass production of IT panels from Q1 2023. The CSOT shipment plan for 2023 is 54M, an increase of 7M compared to 47M in 2022.

In addition, HKC's overall shipment volume and area increased the most in 2022. In 2023, it actively planned to enrich product sizes, increase by 39.5 inches, significantly increase the shipment plan by 50/55/65/75 inches, and increase the layout of oversized products. The HKC shipment plan for 2023 is 47M, but the transfer of customer structure and its own production capacity will result in actual shipments exceeding this plan.

CHOT film production remains stable, with stable TV production capacity in 2023. We plan to mass produce 85 inch products, and the TV panel shipment plan for 2023 is 16.5M.

It can be seen that the reduction or closure of some panel factories will lead to more orders flowing to panel factories in Chinese Mainland. In 2023, the market share of panel factories in Chinese Mainland will continue to increase, and the transferred orders will be undertaken by the three panel factories of BOE/CSOT/HKC. On the whole, the withdrawn or reduced capacity can still be filled by the panel plants in Chinese Mainland, but under the continuous loss, the actual production intention of the panel plants and the control of the crop rate still have great uncertainty. Especially with the early exit of LGD production capacity by the end of this year, it is bound to cause certain market panic, forcing its main customers to rebuild panel supplier relationships.

In the case of another reshuffle of the industry, the trend of market supply and demand in 2023 will be in the hands of panel factories in Chinese Mainland. Whether to relax the tap and continue to seize customers with high crop production; Or tighten the tap, continue to control the crop rate, let the price return to the cash cost line first, so that they can have a chance to breathe, wait for the recovery of market demand, and the decision is in the hands of the head panel factory in Chinese Mainland.

Source: Aowei Cloud Network