Panel Industry Overview (August 2023)

1. Based on differences in emissive technology, flat panel display technology can be classified into self-emissive and non-self-emissive categories. The former includes quantum dot technology and OLED, while the latter primarily consists of LCD. According to Omdia data, in 2021, TFT-LCD panel shipments reached approximately 250 million square meters, accounting for 94% of the global market and a market size of about $11.24 billion, representing 72.5% of the market share. AMOLED panel shipments totaled about 14.21 million square meters, accounting for approximately 5% of the market, with a market size of around $4.15 billion, or 27%. With improving production yields, OLED manufacturing costs are trending downward.

2. In the future, emerging products like curved screen phones and wearable devices will be dominated by AMOLED. In the traditional large-sized panel market, such as TVs, TFT-LCD will maintain its dominance due to mature technology and cost advantages. In the small and medium-sized panel market for phones and tablets, both LCD and OLED technologies have their merits, resulting in a coexistence of the two types of display panels. OLED's share in the phone market is predicted to rise above 50%, facing recent price pressure, while LCD's share declines, indicating a shift towards low-end markets.

3. Industry Characteristics: Technology and capital-intensive, the panel industry experiences rapid technological evolution, necessitating significant capital investments to maintain a competitive edge, even during downward cycles. The benefits of industry consolidation accrue to consumers rather than market participants.

4. The industry is gradually recovering from its winter slump. Global economic stagnation, combined with post-pandemic consumer confidence struggles, resulted in a substantial decline in TV panel sales volumes and continuous price drops from the second half of 2021 to early 2023. As overall capacity utilization decreases, the oversupply situation for panels, particularly LCD TV screens, is easing, leading to stabilization and price rebounds. In 2023, inventory levels are at historic lows, driving TV panel prices higher, especially for larger sizes. Profit and loss balances among companies are diverging, with some starting to turn a profit. Current manufacturers are rapidly increasing their capacity utilization rates to around 80-90%.

5. Supply-side dynamics are improving, but demand-side recovery is not yet evident. Investments in higher-generation production lines yield increased production efficiency and cost advantages, which suppress outdated capacity. In 2021, the domestic LCD market share increased to 62%, maintaining absolute dominance, while Japan, South Korea, and Taiwan continue to scale down, exiting LCD capacity in recent years, pinning their hopes on the OLED market. However, mainland manufacturers' expansion progress has slowed down. Most manufacturers have not planned capacity construction for 2023-2025, except for TCL Huaxing, which has planned an additional 180,000 sheets per month. Domestic enterprises are also actively positioning themselves in the OLED market, with BOE accounting for 15% of single-quarter shipments in Q3 2022.

6. Be wary of the risk of rapidly increasing inventory: With rising TV panel prices, brand manufacturers have increased their orders, expanding purchasing plans. Panel manufacturers are ramping up production accordingly, quickly raising capacity utilization rates. While overall inventory levels are currently low, inventory for some leading TV brand enterprises is showing an upward trend. Faced with a lack of improvement in global whole-machine shipments, there's a risk of adjustments to TV brand purchasing strategies. Continue to monitor changes in inventory and capacity utilization data.

7. Technology Classification and Characteristics

Based on differences in emissive technology, flat panel display technology can be classified into self-emissive and non-self-emissive categories. The former includes quantum dot technology and OLED, while the latter primarily consists of LCD. Following the era of liquid crystal displays (LCD), both LCD and OLED began utilizing semiconductor manufacturing processes. The mainstream products of flat panel displays (FPD) are TFT-LCD panels and OLED panels. Due to advantages such as low working voltage, low power consumption, high resolution, good anti-interference performance, and a wide range of applications, TFT-LCD panels remain the mainstream product, widely used in fields like laptops, desktop monitors, TVs, and mobile communication devices. OLED, short for "organic light-emitting diode," initially launched at a higher price and found applications in displays and lighting. After 2010, with improvements in production technology, OLED screens gradually found applications and promotion in phones, wearable devices, and other fields. Currently, AMOLED is the mainstream product of OLED technology, widely used in small-sized panel displays such as phones.

 

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