Omdia announced it forecasts that television display panel makers will see a robust rebound in the third quarter.
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Unedited press release follows:
Light appears at the end of the tunnel for TV display panel suppliers—with 20 percent surge in customer purchases expected in Q3
Market enters a new phase as Korean TV makers initiate aggressive purchasing plans, despite the continued impact of COVID-19
LONDON (June 9, 2020) — Following a dismal second quarter marred by the impact of COVID-19, television display panel makers now are anticipating a robust third-quarter rebound as TV makers prepare to boost their orders by a forecasted 20 percent.
Display orders from television makers are set to rise to 45.8 million units in the third quarter, up from 38.3 million in the second quarter, according to the Omdia TV Display & OEM Market Tracker – Monthly report. Order growth in the second quarter was uncharacteristically flat, with shipments rising by a scant 2 percent.
Amid fears of a global recession and following several television factory closures in March and April, TV makers were forced to curb their ambitions of boosting their display panel purchasing volumes in the second quarter. As a result, TV panel purchases in March were about 15 to 20 percent lower than Omdia’s previous forecast.
However, starting in the latter part of April, the leading Korean TV makers changed their purchasing strategies and resumed panel buying. These companies and their Chinese competitors are signaling very aggressive purchasing plans for the third quarter.
“Chinese and South Korean television makers plan to significantly boost panel purchasing activity in the third quarter as they respond to falling display prices and competitive pressures in the market,” said Deborah Yang, director of display supply chain at Omdia. “Television makers believe that prices for some TV panels reached a cyclical low point in April and May, compelling them to consider resuming their purchasing activity. Moreover, Chinese TV makers are moving to secure panel supplies in order to head off plans by South Korean rivals to increase their market share.”
Korean TV makers in the third quarter will increase their orders by 30 percent quarter-over-quarter (QoQ), while Chinese TV makers are planning to increase their purchasing volumes by 10 percent QoQ.
“If these aggressive purchasing plans actually materialize, this would represent a record-high quarter, with orders increasing by 20 percentage points compared to the same period one year ago,” Yang said.
TV makers have been facing increasing challenges as they strive to sell their wares during a time when global demand is being hit hard by the COVID-19 pandemic. However, there was unexpectedly large growth in television sales in the United States in March and April. Despite this, retailers are unable to forecast demand for the rest of the year, although they are assuming that consumer spending will decline due to layoffs.
Regardless of the pandemic, the leading Korean TV brands are tenaciously pursuing their ambitions to widen the market-share gap with their rivals.
“Korean TV brands want to lock-in panel supplies in order to support their aggressive shipment plans for the year,” Yang said. “This is compelling Chinese TV makers to follow suit—despite the fact that these companies are already holding excess panel inventories.”
To counter the South Korean onslaught, Chinese TV makers are taking measures to fortify their positions in overseas markets. TV supply chain participants are increasingly concerned that the growing tensions over China’s handling of the COVID-19 pandemic could worsen and expand the trade war. Trade war disputes threaten to spread beyond China and the United States and could start to involve other countries.
While the TV makers have been issuing aggressive order forecasts for the third quarter, it’s important to note that these outlooks are subject to change at any time based on market feedback. TV makers’ purchasing strategies hinge upon multiple TV display supply chain dynamics, including inventories, panel prices, the panel supply base and the competitive landscape.
However, for the time being, the good news about orders is fueling optimism that TV panel prices will stop dropping.
“Following the very rosy demand forecast for the third quarter, LCD-TV panel makers now expect panel price stabilization starting in the latter part of the second quarter,” Yang said.
About Omdia
Omdia is a global technology research powerhouse, established following the merger of the research division of Informa Tech and the acquired IHS Markit technology research portfolio, Ovum, Heavy Reading, and Tractica.
We combine the expertise of more than 400 analysts across the entire technology spectrum covering 150 markets and publish over 3,000 research reports annually, reaching over 14,000 subscribers, and covering thousands of technology, media, and telecommunications companies.
Our exhaustive intelligence and deep technology expertise allow us to uncover actionable insights that help our customers connect the dots in today’s constantly evolving technology environment and empower them to improve their businesses – today and tomorrow.