LCD panel capacity trends

The addition of production capacities and a slowdown in demand post-pandemic have caused an imbalance in the panel market. LCD panel makers have reduced inventory by reducing capacity utilization rates to under 70 percent in 2H22.
LCD panels capacity growthHowever, a surge in demand for TV panels and increasing TV prices are expected to raise utilization rates for Gen 5+ LCD production lines to 77 percent in 2Q23. LG Display’s scaling down of P6, P7, and Guangzhou LCD production lines will result in lower total output than the same period last year, according to TrendForce’s latest research.

The current increase in utilization rates is driven by actual demand for orders, and a healthy supply-demand ratio in the LCD market will persist in 2Q23 with rising utilization rates. The report said panel makers must continue to exercise caution, control, and adopt quick response strategies throughout 2H23 to maintain market balance.

After more than six months of adjusting production, TV panel inventory has reached a healthy level. In 1Q23, Chinese brands began stocking up early for the 618 Shopping Festival, driving up demand and causing TV panel prices to rise ahead of schedule. This upward trend is expected to continue into 2Q23.

TrendForce reports that over 90 percent of Gen 10.x production lines are being used for TV panels, and it is predicted that their capacity utilization rates will increase by over 10 percentage points QoQ, reaching up to 83.2 percent.

The pandemic caused a surge in demand for LCD monitors and notebook panels, resulting in most panel makers reallocating a portion of their TV production capacity to IT projects. Despite a resurgence in demand for TV panels contributing to the growth of Gen 8.x utilization rates, the absence of significant growth in demand for IT products limited the increase in utilization rates to 7.6 percentage points, resulting in a 79.4 percent rate when compared to 1Q23.

For Gen 7.5 and older production lines, the utilization rate is projected to climb to 60 percent due to growing demand in the smartphone panel repair market and a slight increase in demand for IT panels compared to 1Q23.

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