Prices for TV-sized LCD panels are likely to go up in the first half of the year, analysts here said as South Korean display makers are cutting their supplies in a move to convert their LCD facilities to OLED production lines.
The price of large-sized LCD panels in the second half of January rose slightly compared to the first half of the month, according to data from WitsView, a display research division of market tracker TrendForce. WitsView releases display panel price data twice a month.
The price of a 32-inch LCD panel saw the largest hike at 3.1 percent, followed by the 43-inch at 1.4 percent, the 55-inch at 0.9 percent and the 65-inch at 0.6 percent, WitsView data showed.
The 75-inch LCD panel was the only product that suffered a price decline after it dropped 0.3 percent to US$333 in the second half of January.
Analysts said LCD panel prices could keep an upward trend until the first half of the year as South Korean display makers like Samsung Display Co. and LG Display Co. are cutting their LCD panel productions, while TV makers are to expand their display inventories to sell more TVs later.
“The price for TV-sized LCD panels is likely to make a steady rise in the first half,“ Kim Dong-won, an analyst at KB Securities Co., said. “Global TV manufacturers are likely to expand their marketing ahead of major sports events, such as Euro 2020 and the Tokyo Olympics. Also, Korean display panel makers are likely to shut down additional LCD lines.”
LG Display has been working to convert its LCD production lines into OLED facilities, while Samsung Display is also preparing to retool its LCD line to produce its next-generation display known as QD-Display.
The two local display giants have been trying to downsize their LCD businesses as Chinese makers with cheaper products dominated the market in recent years with a massive output.
LG Display, in particular, has been suffering the most among local display makers as more than 70 percent of its sales relied on LCD products. Analysts predicted that the company’s operating loss in 2019 could surpass 1 trillion won (US$856 million).
“The recent hike in LCD prices is likely to improve LG Display’s earnings for this year, but the company will speed its transition to OLED business,” said Kim at KB Securities. “LG Display’s earnings this year will depend on the productivity of its OLED plant in Guangzhou, China.”
Analysts, however, predicted that the upward trend in LCD prices may not last until the end of the year as Chinese makers are ramping up the LCD production capability of 10th-generation factories.
“It is likely that this upturn cycle in the LCD industry is to last about two quarters considering the utilization rate of Chinese display makers in the second half,” Kim Hyun-soo, an analyst at Hana Financial Investment Co., said.
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