[Asia Economy Reporter Changhwan Lee] The price of liquid crystal display (LCD) TV panels continued its upward trend this month following last month.
According to market research firms Witsview and KB Securities on the 9th, the prices of LCD TV panels in the first half of February increased by 0.6% to 3.0% across all products (32~75") despite not reflecting the impact of the novel coronavirus infection.
LCD TV panel prices have been rising for two consecutive months since last month, and this is the first time in 39 months since November 2016 that prices for all products have increased.
As of the first quarter, the inventory of LCD TV panels for the top three global TV companies?Samsung Electronics, LG Electronics, and Sony?is estimated to be an average of 2 to 3 weeks, indicating that inventory normalization has been achieved, according to KB Securities.
LCD panel prices are expected to rise further due to the impact of the novel coronavirus.
With the spread of the novel coronavirus, production disruptions at Chinese LCD panel manufacturers (such as BOE and CSOT) seem inevitable, and from the first quarter, TV set manufacturers are expected to begin strategically accumulating panel inventory amid the price increase of LCD panels.
In particular, China, which accounts for more than 50% of the global LCD panel supply, is expected to see a 20% to 30% decrease in LCD panel production in February, leading to an estimated 10% to 15% reduction in LCD panel supply for the month.
If the virus spread does not subside in March, the supply shortage of LCD panels is expected to worsen.
Dongwon Kim, a researcher at KB Securities, stated, "The LCD panel market in the first half of 2020 is expected to shift from a demand-driven to a supplier-dominant market due to production disruptions caused by the virus spread," adding, "LCD panel prices are expected to enter a rising phase, which will help improve the performance of Samsung Electronics and LG Display."
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