- Panel prices expected to undergo a substantial decline in 2021.
Global TV shipments will increase by 2.8 per cent to 223 million units from 217 million units a year ago due to sporting events taking place this year.
Tokyo Olympic Games and the UEFA European Championship, which were originally planned for 2020 but subsequently delayed due to the pandemic will take place this year, will drive global TV demand to yet another record high.
TrendForce indicates that the tightening supply of TV panels throughout 2020 and faster-than-expected demand recovery in the second half both indirectly exacerbated the existing shortage of wafer capacities for IC products.
Therefore, upstream suppliers, including foundries and panel makers, have become increasingly selective of their clients, and tier one TV brands have an advantage in securing wafer capacities from foundries due to their massive order volume.
2020 marked the first time when the combined market shares of the top five TV brands surpassed 60 per cent. For tier two, tier three, and white-label manufacturers, the strained supply of panels and IC products will make it harder than ever for them to compete against tier-one brands in the market.
Panel prices shoot up
Whereas the supply of TV panels dwindled in 2020 owing to the reduction in Korean panel manufacturers’ production capacities and the slowdown in new Chinese panel manufacturers’ mass production ramp-up, demand skyrocketed due to extended stay-at-home times induced by anti-pandemic measures.
Given such imbalanced supply and demand, prices of 40-inch to 55-inch TV panels rose by more than 60 per cent within a mere six months, while prices of 32-inch panels more than doubled, in turn posing a great challenge for white-label TV manufacturers, which had traditionally survived in the market by offering low-priced TVs.
As the prices of TV panels underwent increases every month throughout the second half of last year, the profitability of 32-inch to 55-inch TV units, which were the market mainstream, gradually plummeted as well. In response to declining profits from these low-priced products, TV brands began to redirect their procurement activities towards larger-sized panels.
In particular, this period saw a 23.4 per cent and 47.8 per cent growth in 65-inch (and above) and 70-inch (and above) TV panel shipments, respectively.
Under the assumption that panel prices will not undergo a substantial decline in 2021, TV brands will likely accelerate their product strategies for ultra-large-sized TVs.
TrendForce forecasts a potential 30 per cent year-on-year growth in the shipment of 65-inch (and above) TVs this year.