Since Q2’14, LCD TV panels have been in tight supply due to increases in purchasing by some leading LCD TV brands. As shown in Digital Search’s Monthly Large-Area LCD Pricing Report, prices for mainstream sizes (32”, 40”, 42”, 48”/49” and even 50”, 55”) have been increasing. In Q3’14, there were reports that leading TV brands Samsung and LG Electronics increased their 2014 annual business plan to 48M and 34M units, respectively, which has helped the LCD TV panel – especially open cell – shortage to continue. Chinese TV makers also are gearing up for the Q4’14 and 2015 holidays, and are increasing their panel forecasts.
LCD TV production by brand
As reported in MarketWise-LCD Industry Dynamics, the top 15 LCD TV brands produced 15.5M LCD TVs in August, the highest monthly total since January. Preliminary estimates are for the production amount to reach 18.7M in September, which would be 9% growth Y/Y.
As TV brands continue to increase production in response to strong market pull and in preparation for the holiday seasons, the top 15’s production is expected to reach 21.1M in October, which will be 15% growth Y/Y, which would be not only the highest this year, but ever. Monthly production is then expected to fall, but maintain a higher level than in Q3.
October is typically the seasonal peak for global TV production and set shipments, but the record high expected this year shows how determined the TV brands are to see strong Q4 sales. In fact, many leading brands, including Samsung, LGE, Sony, and Chinese, have reduced retail prices (for some models by double digits) in an attempt to stimulate sell-through.
All of the top 15 brands are expected to increase October production except Chinese TV makers, who are facing fewer working days due to the October National Holidays. But brands like Samsung and LGE in particular are increasing October production and shipment plans by more than 40% M/M. Samsung and LGE accounted for 48% of global revenues in Q2’14, according to the Quarterly Global TV Shipment and Forecast Report, so they have great power over panel allocation and price negotiation.
For panel makers, the strong uptick in October and the still-strong TV production in Q4’14 could indicate that panel demand will not fall drastically and will remain in tight supply in Q4. While excess panel shipments in Q2 caused concern for panel inventories, TV makers’ strong production plans may indicate that inventory might not be much of a concern, at least for the rest of this year.
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