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>> South Korea's Samsung, LG and Innolux, both lost in the semi-annual report 22th,Oct,2019
The global panel industry is in a dilemma. The trough continues for at least 2 years. Panel prices have generally been lower than cash costs, and manufacturers' losses have continued to increase.
Since 2017, the price of display panel industry products has been falling, and industry insiders believe that panel prices have fallen, mainly due to overcapacity and oversupply. Taking BOE as an example, two of the three major segments of the business achieved growth, with only display and sensor components down.
Whether it is South Korea's Samsung and LG, or Taiwan's AUO and Innolux, they have all suffered losses in their semi-annual reports.
Samsung's first quarter revenue was 52.4 trillion won (about 45.18 billion US dollars), down 13.5% year-on-year; net profit was 5.04 trillion won (about 4.35 billion US dollars), year-on-year. A drop of 56.9%, the drag of the display business is an important reason. The Samsung Display Panel business fell into losses in the first quarter due to a decline in demand for flexible screens and an increase in the market for large displays.
In the second quarter of 2019, LG Display's display company LG Display's revenue dropped 5% to 537.30 billion won (US$4.56 billion) and its operating loss was 369 billion won (228 billion won in the second quarter of 2018).
AUO's consolidated revenue for September was 23.87 billion yuan (NT), a decrease of 1.1% from August and a 13% decrease from the same period last year. The consolidated revenue for the third quarter was NT$70.05 billion, which was the same as the second quarter, a decrease of 13.6% from the same period last year. AUO Chairman Peng Shuanglang once said that the company's capacity utilization rate will be adjusted in the third quarter, mainly depending on two factors, one is market demand, and the other is whether the panel price maintains a healthy enough level.
Innolux's consolidated revenue in September was NT$21.7 billion (approximately RMB 5.028 billion), an increase of 3.1% from August but a decrease of 11% from the same period last year. The third quarter self-consolidation and revenue was NT$63.3 billion (approximately RMB 14.669 billion), a decrease of 14.4% from the same period last year and an increase of 0.2% from the second quarter.
To this end, panel makers in South Korea, Taiwan and the mainland have been reducing the utilization of TV panel products since September to improve the imbalance between supply and demand and stabilize prices.
In view of the large-size panel investment area in each region, the Korean panel factory has closed a number of production lines this year, and the capacity of the new factory of China's panel factory has continued to open. The proportion of large-size glass investment area has increased to 42.3%, making it the largest investment area. It is expected to approach 50% in 2020.
In the case of global panel makers entering the fierce competition, due to the slowdown in the growth of the consumer application electronics market, the panel production capacity is over, and the industry is in a low-price competition cycle. According to panel industry analysts, the panel industry trough will last at least 2 years. .
The industry predicts that flexible OLED screens will grow rapidly, so in recent years China and South Korea have increased their investment in flexible AMOLED panels. In the past two years, 50% of the global flexible AMOLED production capacity has come from mainland China.
Even though Korean manufacturers Samsung and LG have encountered difficulties in screen manufacturing profits and revenues, their technology is still leading in the manufacture of mobile phones and large-size TVs.
In the long run, under the influence of 5G, AIoT and 8K tides, the panel industry may still be in a short period in the short term, but the potential in the medium and long term is still huge.
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