Despite Q3 Price Stabilization, LCD Panels Will Remain in Oversupply, Says IHS

LCD panel prices will stabilize this quarter, due to a production scale back of 32-, 40- and 43-inch panels, but longer term, panels will remain in oversupply, leading to a restructuring of older TFT LCD fabs, said a Thursday IHS Markit report. Planned new factories will bump up large display panel production capacity 31 percent -- roughly 836 million square feet -- from 2018 to 2021, about 527 million more square feet of capacity than the market will require, said the researcher. The supply-demand glut level is forecast to widen from 12 percent in 2018 to 23 percent in 2021, remaining above the 10 percent level considered to define a balanced market. From 2019 to 2021, LCD TV panel capacity will increase, largely from Gen 10.5 and 11 factories in China, said IHS. “Some panel makers may be forced to reduce utilization rates, while some planned capacity may never be built,” said analyst David Hsieh. For the industry to return to more balanced supply and demand, multiple Gen 5, 6 and 8 factories will likely need to be shut down, he said.