Samsung LCD factory postponed to shut down analyst: minimal impact on the overall panel quotation

Samsung Display (SDC) announced last week that it would postpone the time when the LCD production line was shut down again. Xie Qinyi, senior research director of Omdia's display department, said that SDC mainly supplies Samsung’s own LCD TVs and ships them to Taiwan manufacturers. The impact is not significant, but the Lu factory BOE, China Star Optoelectronics, etc. will be affected; in terms of quotation, because the production line that has been closed after the delay has also been reduced, the impact on the overall panel quotation is also minimal.

SDC originally had 4 production lines. After two of them were closed and sold, only one 7th generation line and one 8th generation line are still in operation. It is understood that SDC originally planned to close all of its LCD factories at the end of this year, but last (November) decided to extend the suspension time to March next year. Last week, it decided to maintain the 7th generation line until the first quarter of next year. The generation line will not be closed until October to November next year. According to foreign media reports, SDC has recently announced this decision to its production line employees in Asan, South Korea.

Xie Qinyi said that although the 8th generation line will be postponed to close, it will not retain all production capacity. It is expected that SDC will only supply about 4 to 5 million pieces next year, which will have little impact on the overall panel quotation. In addition, because the current supply of components such as driver ICs is very tight, it will be more difficult for SDC that is about to close the production line to obtain components, and its impact on the market will further decline.

Because the housing economy has a fever, the demand for TV has risen, and the price of panel has also soared since the middle of this year, which caused SDC to postpone the closure of the production line for the second time. Panel quotations continue to rise strongly in late December. According to Trendforce’s latest data, the average price of 55-inch TV panels has reached US$172, an increase of US$4 in the past two weeks; the average price of 27-inch monitor panels is US$80.7, an increase in the past two weeks US$1.2; the average price of a 14-inch notebook panel was US$31.1, an increase of US$1.1.

AUO and Innolux have also stated recently that because the panel demand gap is still large, next year's Lunar New Year will make an exception and sprint production with all-out efforts. This shows how hot the panel market is. The industry pointed out that since the lifestyle of working at home, studying, and entertainment will still be mainstream by the middle of next year, the market will have to reach a balance between supply and demand until the second quarter of next year. Panel prices are expected to enter a plateau period in the second quarter. (Economic Daily)