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By contrast, panel prices of some size segments might shrink their price fall scale or even stop falling for 3 reasons. First, Samsung Display (SDC) and LG Display (LGD) have steadily reduced some of their LCD capacities. Next, Taiwanese and Chinese panel makers either moved down their capacities or changed their product mixes. Third, the recent demand is from year-end promotional campaigns in Europe and USA and the demand is from China's November 11 e-commerce campaigns and stocking-up momentum between January 1 and Chinese New Year Holidays.
Iris Hu, the research manager of TrendForce, predicted the outlook in 4Q19, 1Q20 and 2Q20. At the end of 2019, brands might conduct inventory control. Besides, the upcoming 1Q20 is expected to be a typical traditional off season. Therefore, the risk of price fall might rise, and capacity reduction scale might expand. When might TV panel price stop falling and become stable? The answer might be 2Q20 when brands might start to stock up for their new spring product launches and Tokyo Olympic Games.
The average price to 32" TV panel is an indicator. It has dropped for more than 20% since June 2019. It not only fell below the cash cost, but also approached the variable cost. In this way, BOE Technology (BOE) who is the major supplier of the 32" reduced production, in order to decrease loss of money.
After panel makers started to limit their production of the 32", in September, the 32" panel price fall scale might narrow to US $1. The lows of price range might even remain constant.
On the one hand, in 4Q19, the demand from international brands might begin to weaken. On the other hand, Chinese brands keep on stocking up for their sales on November 11 and sales between January 1 and Chinese New Year Holidays. Therefore, the 32" panel price might remain stable until mid-November. However, when the end of 2019 approaches, brands might conduct inventory control and a traditional off season might come. Then the 32" panel prices might move down.
Because panel makers are losing money, they gradually begin to transfer capacity. Some moved Gen. 7.5's capacity of the 50" panel to make the 43". Some increased the 43" production shares in Gen. 8.5 or Gen. 10.5. On the one hand, these factors show that the 43" is one of the few products that are still profitable. On the other hand, the problem is that increasing supply makes price fall unstoppable. In September, the 43" FHD panel supply rose because of panel makers in China, so its price might fall by US $3. When the supply and demand can't balance in the short term, the price might continue falling.
Before November, it is China's year-end peak-season for promotional campaigns, and brands' demand to the 55" and 65" panels has grown. In addition, prices of the 55" and 65" all fell below the cash costs. Moreover, when panel makers cannot bear the loss of more money, the continuously-rising demand might help shrink panel price's fall scales.
Hence, in September, the price fall scales to 55" and 65" are both projected to narrow to below US $5. The price of 55" might temporarily remain constant because before the end of 2019, Korean panel makers reduce their supply. Regarding the price of 65", because of oversupply, it is unlikely to stop dropping.
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