The price of LCD panels, which was still declining sharply at the end of last year, has now changed. The price has started to increase at the beginning of this year. The recent epidemic crisis has worsened the situation. However, the core factor of LCD price increase is due to the reduction or suspension of LCD production lines by many manufacturers since last year. The reduction in LCD production capacity is even worse than in 2016.
Like semiconductor chips, panel production has experienced a cycle of price increase and price decrease. In 2016, global LCD prices experienced a big price increase. The LCD production capacity that was withdrawn that year reached 3.615 million square meters, while the LCD production capacity that was closed last year and this year was higher. The production capacity closed last year was 2.513 million square meters, and the capacity to be closed this year reached 5.519 million square meters, accounting for 6.47 percent of the global production capacity, which is 1.07 percentage points higher than the exit ratio before the last major price increase.
The main players in this wave of capacity withdrawal are South Korean companies, especially Samsung and LGD, which are also the world's No. 1 and No. 2 TV brands. However, Samsung's main production capacity has long since switched to OLED panels. There are not many LCD production lines that have withdrawn. LG It is to close South Korea's local P7 and P8 production lines, and the exited production capacity accounts for 12 percent of its global production capacity.
At present, several LCD panel factories in mainland China account for about 50 percent of the world's LCD production capacity. Companies such as BOE are also reducing LCD investment, but the LCD production capacity withdrawn from the Korean company is not as large as that of the Korean company. On the contrary, after the Korean company withdrew from the LCD production capacity, Samsung Companies such as LG and LG have to increase their outsourcing of LCD panels in order to reduce costs. Therefore, in this wave of LCD production adjustments, Chinese companies such as BOE will also benefit in the future and further increase their LCD market share.
