The price of large-screen TV panels fell sharply in May, which surprised the industry. In May of this year, TV panel prices fell faster than expected due to greater inventory pressure. This caused panel makers great panic. . The sharp drop in overall prices in May surprised the industry.
According to IHS analysis, the current TV panel market has become quite conservative due to several reasons.
1. At the end of May this year, the United States proposed to impose a 25% tariff on Chinese-made televisions, which has affected the needs of US retailers. Now is the promotional season, retailers are looking for alternative solutions to prevent tariffs from taking effect.
2. The demand for the World Cup seems to be weaker than expected. Some TV manufacturers have lowered their shipment expectations for the second quarter in order to adjust inventory.
3. Chinese TV makers still maintained high panel inventory at the end of April. As a result, they will have to manage panel purchases carefully and may cause panel makers to lower prices. For Chinese TV makers, the upcoming 618 promotions are critical.
4. Most panel makers have decided to maintain production capacity in the second quarter in order to remain cost-competitive because the sharp drop in panel prices has seriously eroded profits.
5. BOE's 10.5-generation line has been able to produce 65-inch panels, and more than 10 TV manufacturers have already qualified for panel purchases. Some TV makers used this as a bargaining chip for price negotiations, despite the production capacity of BOE 10.5 Not completely released.
6. In order to clear inventory, TV manufacturers are pricing TV at a lower price, so they demand that panel makers make more price concessions in the second quarter.
At the same time, it is worth noting that the demand of some TV manufacturers is increasing, especially China's low-end TV manufacturers, who have been negotiating with panel makers in recent months to obtain certain "special" prices. . Psychological warfare plays an important role in the negotiations. In order to encourage Chinese low-end TV manufacturers to re-fill demand, panel makers have provided them with Q2 or Q3 price protection in order to support their ambition to drive shipments.
According to panel prices requested by TV manufacturers, far below the lowest point of the previous cycle, and will set a new record low, IHS expects no panel makers to overcome financial losses. It is worth noting that when the panel makers were in deficit in the second quarter, what was their reaction? They may be forced to adjust plant utilization, rearrange production capacity, or simply lower prices to launch panels, so the risk of a sudden disruption in the supply chain cannot be ignored. The price war between 65-inch LCD TV makers has begun, lower? Market sales prices may affect sales in the second half of 2018. In addition, if U.S. tariffs are resolved, U.S. retailers may have to continue demand recovery in the second quarter.
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