The honeymoon may be over for LCD TVs: report

LCD flat panel TV
Breaking a long growth period, LCD TV panel shipments are expected to decline in 2020, falling by 7% to 265 million, according to business intelligence firm IHS Markit. (Pixabay)

For most of the 2010 decade, the flat panel liquid crystal display (LCD) TV has been one of the stable fixtures in the consumer electronics market. Having completely replaced the old CRT-based TVs, LCD TVs have benefitted from technology advances that have improved resolution and made possible large screen sizes—over 50 in. diagonal—a much more common sight in many households.

But LCD TVs are hitting a roadblock. For the first time since 2011, global LCD TV panel shipments are expected to decline in 2020, falling by 7% to total 265 million, according to business intelligence firm IHS Markit. The 7% decrease represents the largest annual decline in the history of the LCD-TV industry.

The signs are not good. The 2020 decline will come after two consecutive years of market stagnation with shipments at 289 million units in 2018 and 284 million in 2019, according to IHS Markit. Market growth stopped during those years despite fab capacity expansions at Gen 10.5 and Gen 8.6 TFT-LCD facilities in China. The cessation of growth also defied the growing demand for larger LCD TV panels sized 55 inches and above.

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The slower demand and increasing oversupply of LCD TVs have put downward pressure on panel prices and prompted suppliers to cut production. Many suppliers have taken a more conservative approach by reducing fab utilization starting in mid-2019 onward and initiating more aggressive fab restructuring plans. 

“Since the Chinese panel makers started their Gen 10.5 fabs in 2018, Korean and Taiwanese panel makers running Gen 7 and Gen 8 fabs have been facing tough competition in the larger-size LCD TV market,” said Peter Su, principal analyst at IHS Markit | Technology, in a statement. “Due to the fast-declining prices of 65-in.and 75-in. LCD TV panels produced by Gen 10.5 fabs, they are now in a critical situation. As a result, Korean LCD TV panel makers have resorted to restructuring their LCD TV fabs, while their Taiwanese competitors have reduced LCD TV panel production and diverted resources to producing monitors and notebook PC panels instead. This scenario is expected to lead to the big drop in 2020 LCD TV panel shipment.”

IHS Markit forecasts the Korean share of LCD TV panel shipments in 2020 to decrease by about 9% compared to 2019, while the Chinese share is set to increase by 10%. Korean LCD TV panel makers may eventually exit the LCD TV panel business, relinquishing their market share to their Chinese rivals. For details, see the table below.

 

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Large LCD TV panels are managing to hold their own. “Even though the volume of the LCD-TV panel shipments has eroded, demand for larger-size panels will continue to grow,” Su added. “IHS Markit| expects that 65-in. and larger LCD TV panel shipments will reach 37 million units in 2020, up from 30.6 million in 2019. However, there is a possibility of supply tightness of some panel sizes due to the shuttering of Gen 8.5 fabs that produce 49-inch and 55-inch LCD TV panels.”

IHS expects Chinese electronic components producer BOE to garner the lion’s share of 2019 LCD TV panel shipments, at 19%, followed by Korea’s LG Display with 15.4%, and Taiwan’s Innolux, at 15.3%. IHS expects Chinese companies to steal even more panel sales next year.

A shift in technology from LCDs to organic light emitting diode (OLED) technology could also factor into the decline of LCD TV panels. IHS Markit reported in September that sales of OLED TV displays were growing rapidly, and despite a higher price than LCDs were gaining design-ins because of their slim form factor, light weight, and wide color gamut.

 

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