Although the COVID-19 epidemic has triggered a downward trend in panel demand, panel manufacturers still plan to maintain high factory utilization in the third quarter of this year to prevent increased manufacturing costs and a decline in market share. However, they will face two major variables: glass substrate supply and panel price changes.
The report stated that panel manufacturers expect that the possibility of a decline in panel demand in the third quarter of this year is relatively limited, and plan to maintain factory utilization at 90%, an increase of 1 percentage point year-on-year and month-on-month. As of the second quarter of this year, panel manufacturers have maintained their utilization rate at a high level of above 85% for four consecutive quarters.
Since the middle of the second quarter of 2021, panel demand in end markets and factory capacity utilization rates of panel manufacturers have shown negative signs. Although panel factories plan to maintain high capacity utilization, changes in glass substrate supply and panel prices will be huge variables.
In May 2021, TV demand in the North American market dropped to close to the level before the epidemic in 2019. In addition, TV sales in the Chinese market after the 618 promotion were lower than expected, down 20% year-on-year.
The supply of glass substrates may not be able to keep up. The abnormal weather in early July affected the production efficiency of glass substrate production furnaces, and some glass substrate manufacturers have not fully recovered from the accidents since the beginning of the year, resulting in a shortage of LCD glass substrates in the third quarter of 2021, especially the 8.5 and 8.6 generations. Therefore, panel factories may face a situation where glass substrate supply cannot keep up with planned capacity utilization;
Panel prices are expected to decline. The high capacity utilization rate of panel factories is expected to put pressure on TV open cell panel prices, which have begun to decline in August. Under different strategies of panel factories choosing high capacity utilization rates or avoiding rapid price declines, panel factories may change their third-quarter capacity utilization plans.
ANNA