Graphic: LCD TV Panel Prices January 2020 – June 2021 – Source: DSCC
I’m hearing from some industry friends that LCD display panel prices are rising – which on the surface likely seems incongruous, given the economic slowdown and widespread indications that a lot of 2020 and 2021 display projects went on hold because of COVID-19.
On the other hand, people are watching a lot more TV, and I saw a guy at Costco the other day with two big-ass LCD TVs on his trolley. And a whole bunch of desktop monitors were in demand in 2020 to facilitate Work From Home. So demand for LCD displays is up outside of commercial purposes.
Organizations that pay attention to supply chains and pricing confirm prices ended high in 2020 and are expected to climb again this quarter and flatten out later in the year.
The Korean business portal BusinessKorea says one explanation was a power outage that shut down a big glass substrate factory in Japan, which was serious enough that the plant will only get back to normal sometime in this quarter.
Continuing strong demand and concerns about a glass shortage resulting from NEG’s power outage have led to a continuing increase in LCD TV panel prices in Q1. Announcements by the Korean panel makers that they will maintain production of LCDs and delay their planned shutdown of LCD lines has not prevented prices from continuing to rise.
Panel prices increased more than 20% for selected TV sizes in Q3 2020 compared to Q2, and by 27% in Q4 2020 compared to Q3, and we now expect that average LCD TV panel prices in Q1 2021 will increase by another 9%.
DSCC’s Bob O’Brien says:
Prices increased in Q4 for all sizes of TV panels, with massive % increases in sizes from 32” to 55” ranging from 28% to 38%. Prices for 65” and 75” increased at a slower rate, by 19% and 8% respectively, as capacity has continued to increase on those sizes with Gen 10.5 expansions.
Prices for every size of TV panel will increase in Q1 at a slower rate, ranging from 4% for 75” to 13% for 43”. Although we continue to expect that the long-term downward trend will resume in the second quarter of 2021, we no longer expect that panel prices will come close to the all-time lows seen earlier this year. The situation remains dynamic, and the pandemic may continue to affect both supply and demand.
The industrial PC supplier TouchThink says rising prices also owe to rising raw materials costs, notably copper for printed circuit boards.
The OLED Association suggests:
TV panel prices however, continued to rise at an ‘unprecedented’ rate again, far ahead of our expectations, and panel producers do not seem to be hesitant about continuing to push prices further.
Given that TV set demand continues to outstrip production capacity, panel producers are already expecting to raise prices again in 1Q, typically a sequentially weaker quarter. There is a breaking point at which TV set brands will forego requested panel price increases in order to preserve what is left of margins, and with the increasing cost of TV set panel inventory, we expect TV set producers to become unprofitable relatively quickly.
Does that mean they will stop buying and face losing market share to those that are willing to pay higher prices to see unit volume growth? Eventually, but heading into the holidays it doesn’t seem likely this year, so we expect TV panel prices to rise again in December.
With a lot of the buyer market for digital signage technology financial wheezing its way into 2021, rising hardware prices are likely even less welcomed than in more normal times. But the prices for display hardware, in particular, are dramatically lower they were five years ago, and even more so looking back 10-15 years.
At the same time, everything about commercial displays has got better – most notably visual quality, weight, management and physical footprint.