As panel prices continue to fall, it is not easy for manufacturers to make profits in the second quarter. If Sino-US negotiations hit the rocks again, trade disputes will continue to lead to a weak peak season in the second half of the year, making the possibility of panel prices falling below cash costs. The operating pressure will increase in the second half of the year and may face the choice of reducing production.
The Jibang Consulting Optoelectronics Research Center (WitsView) said that although the Sino-US trade situation has slowed down after the G20, it still needs to continue due to the follow-up Negotiations, before the situation is not completely clear, the demand for end products in the second half of the year turned conservative, resulting in panel stocking demand is not as expected. As panel prices continue to fall, it is not easy for manufacturers to make profits in the second quarter. If Sino-US negotiations hit the rocks again, trade disputes will continue to lead to a lack of peak season in the second half of the year, making the possibility of panel prices falling below cash costs soaring. Will rise, may face the choice of whether to cut production.
Upstream components are missing The problem of goods is no longer, the difficulty of bargaining between panel makers and end customers is increasing
Jibang Consulting said that the smartphone market is facing recession this year, and the United States is loosened. Huawei’s ban, but it has not been removed from the export control list, Huawei’s mobile phone shipments may still be affected, and orders for component manufacturers including COF have previously been affected by the relevant ban. Originally expected due to COF supply Tensions will affect the shipment of large-size panels in the second half of the year. It seems to have been lifted. The market is also waiting to see if the driver ICs have not been cut in price for several consecutive quarters, and whether the price will start to loosen.
In addition, because some panel manufacturers have arranged for the maintenance of the equipment for maintenance,This year, the shipment area of large-size panels will be reduced compared with expectations, which will slightly improve the tight supply of polarizers. Therefore, when the panel makers negotiate with the end customers in the second half of the year, it may be difficult to keep the goods out of stock. The attitude of the price.
Panel quotation cannot be stabilized, and the likelihood of falling below the cost of cash in the second half of the year increases
In terms of second-quarter panel price, the mainstream demand for 14-inch and 15.6-inch notebooks with the largest demand for notebooks is quite close to the cash cost level, 18.5 inches/19.5 inches/ Small-size LCD monitor panels such as 21.5-inch are also beginning to show no profit. The price increase of some TV panel sizes only lasted for two months, and in June it began to continue to fall. Taking 32-inch as an example, the current cash cost is about 35~36 USD/piece, but the quotation has already come to 38~39 USD/piece. If the decline does not change, it is likely to fall below the cash cost in the second half. Other sizes are like The 55-inch and 65-inch are also facing the same situation.As the profits of the three major applications have been rapidly eroded, if the panel price falls below the cash cost, the panel factory will be forced to further consider whether to reduce production.
The panel factory is the first to control costs while expanding the niche product layout
Jibang Consulting pointed out that in the past two or three years, the mainland China panel factory has expanded its production endlessly, and the oversupply of the panel will become the norm in the future. Unlike the Chinese mainland panel factory, which has subsidies from the government, and the Korean panel factory has its own brand to maintain demand, the panel factory in Taiwan is weaker than that.
Although AUO and Innolux have continued to cultivate new products for the past two years, such as AUO’s IT panels in 8K TV panels and e-sports, which have achieved good results. The company is actively developing products such as Mini LED backlights and Dual Cell and other brightness and contrast enhancements, but the key to the operation is ultimately profitability.
For the panel factory,Improving the cost structure has become a top priority. Because variable costs such as components are difficult to control, panel makers continue to optimize the manpower and product mix of each plant, while minimizing capital expenditures, and hope to meet the second half of the year by reducing fixed costs. For the daunting challenge.