Nomura: Asian display industry will set off a new round of competition

With the increase in new production capacity exceeding expectations and various external negative changes affecting demand, Nomura warned that a new round of competition in the Asian display industry will begin. From 2023, most of the new production capacity will come from 8.5/8.6 generation factories, which is expected to detonate a new round of competition.

The latest report released by Nomura pointed out that due to factors such as the continuing geopolitical conflict, the rapid spread of the epidemic, and the sharp rise in inflation, the demand for the global display industry has turned weak this year, and with the continuous opening of new LCD production capacity in the next three years, the industry outlook is not optimistic. , especially in the field of information technology (IT) displays.

The report pointed out that since the third quarter of last year, the panel price momentum has continued to weaken, and it has continued to the present. Throughout this year, market performance will mainly depend on demand rather than supply. Nomura also maintains a conservative view of the entire display industry, so it is not surprising that panel prices are declining.

From the perspective of different products, the prices of 32/43-inch TV panels have gradually stabilized in the first quarter, but the prices of 55/65/75-inch TV panels still experienced an unprecedented double-digit decline. Considering the market environment, the turning point in prices may be delayed to the end of the second quarter or the beginning of the third quarter, rather than the second quarter as originally estimated.

Due to signs of recession in the consumer electronics market, panel prices for IT products (mainly monitors, notebooks and tablets) fell by 5% to 9% in the first quarter of this year, and this trend is expected to continue into the second quarter. Unless the global market environment improves significantly, the panel industry will not recover strongly in the second half of the year.

In the last panel price cycle from 2017 to 2020, the TV panel industry was mainly a competition for market share. However, after 2020, the panel industry in mainland China has taken the lead. According to the shipment data in January and February this year, the shipments of the top three panel makers in mainland China have accounted for 58% to 60% of the world's total, which is expected to be more strictly controlled. Capacity utilization, so there will be no bargaining competition in the previous cycle.