April Large Area Display Shipments Hit Historical Low Since Start of Pandemic
Shipments of large-area TFT LCD panels dropped to historical lows in April as pandemic impacts combined with disruptions from the war in Europe and lockdowns in China dampen demand, according to Omdia. Shipments decreased by 10% Month on Month (MoM) and 5% Year on Year (YoY) in April, to 74.1million units, representing historically low shipment performance since May 2020.
"With continued ramifications from the pandemic, demand for IT panels for monitors and notebook PCs remained strong in 4Q21. But as the market became saturated starting in 2022, IT panel shipments started slowing in 1Q22 and early 2Q22," said Robin Wu, Principal Analyst for Large Area Display & Production at Omdia. Wu said that notebook panel shipments decreased 21% MoM in April, to 18.2 million units, or a 33% decrease from a peak of 27.3 million units in November 2021.
While TV panel prices have decreased noticeably since 3Q21, TV LCD panel shipments increased to a peak of 23.4 million in December 2021, driven by low prices. But rising inflation, the Ukraine crisis, and continued lockdowns in China have slowed demand. As a result, TV panel shipments posted a 9% MoM decline in April, to 21.7million units. Many TV panel prices have fallen below manufacturing costs, and panel makers began to lose money in 4Q21. But Chinese panel makers, the biggest capacity owners, still haven't reduced their fab utilization. With no sign of demand recovery in 2Q22 or even 3Q22, the supply/demand situation is unlikely to see improvement, Wu said.
"IT LCD panels could still deliver positive cash flow for panel makers. But with prices dropping dramatically, panel makers will soon start to lose money in their IT panel business," Wu said. "Maybe only then will panel makers reduce their glass input and the overall supply/demand situation will return to balance," concluded Wu.