Branded device vendors continue to shift their demand towards larger sizes, and February shipments of 65-inch panels advanced against the headwinds and went up 4% compared with January shipments.

Iris Hu, research manager of WitsView, said panel demand from Chinese brands has started to pick up again since the start of this March because they need to prepare for the major online promotion campaigns in April and Chinese Labor Day sales in May.

“Chinese brands will mainly be stocking up large panels sized 55 and 65 inches as they can add more to product margins,” said Hu. “Conversely, brands are abandoning panels in the 40- to 43-inch size range. Because of high prices, brands are unable to achieve profitability from using panels belonging to this size range.”

WitsView estimates that TV panel shipments in March will rise 10% from February. For the entire first quarter, however, high prices will continue to impact shipments for small- and medium-size categories. First-quarter TV panel shipments are projected to post a sequential decline of 11% to 12%.

Looking at February shipment results of the six major panel makers, LG Display (LGD) posted a 10.1% drop from the prior month, totaling 3.85 million units. LGD postponed some deliveries to March. Furthermore, its shipments of mainstream 43- and 55-inch products fell 12.8% and 11.4% respectively from January. However, shipments of 65-inch panels remained steady due to demand from the group company LG Electronics and other first-tier brands.

Innolux posted a huge monthly shipment growth of more than 30% for its 65-inch panels in February because of strong demand from Samsung Visual Display. At the same time, the company’s shipments of 23.6-inch panels increased significantly by 14.1% compared with January as demand for this size category returned in the emerging markets. For the entire large-size panel shipments in February, Innolux registered a marginal decline of 1.9% from the prior month, totaling 3.13 million units. This was the best result among the six major panel makers.

BOE Technology (BOE) shipped 2.93 million TV panels in February, down 6.2% from the previous month. BOE’s shipments of 32-inch panels fell 10% monthly as its Gen-8.5 fab in Chongqing, China, adjusted its product mix. The production of 32-inch TV panels was scaled back so that more of the fab’s capacity can be used to make notebook panels. This move also helped BOE stabilize prices for its 32-inch products.

Furthermore, combined shipments of 48- and 49-inch panels from BOE also rose 9.4% from January. Prices of panels in the medium-size range (40- to 43-inch) surged and peaked in recent months on account of decreasing market supply. Branded device vendors in response shifted their demand to a larger size range, and this in turn benefited BOE’s shipments of 48- and 49-inch panels during February.

China Star Optoelectronics Technology (CSOT) was affected by the fewer number of workdays in February. The company’s TV panel shipments for the month totaled 2.8 million units, down 7.8% from January.

Samsung Display (SDC) has been modifying its production processes and equipment to increase the share of high-end UHD-resolution panels in the product mix. This move, which was to help compensate for the revenue loss following the closure of L7-1 fab at the end of last year, also indirectly affected SDC’s overall panel shipments. For February, SDC shipped 2.72 million units of TV panels, representing a monthly decline of 5.5%.

The entire TV panel shipments from AU Optronics (AUO) fell 5.3% monthly in February to 2.1 million units. However, there were increases for specific large-size categories. Shipments 50-inch and the 55-inch UHD products respectively grew 20% and 7.4% compared with the prior month. Demand for AUO’s large-size, high-end and niche products continues to grow due to long-term market development efforts by the company.