Omdia’s latest research shows that LCD TV panel shipments will decline by around 6% in 2021, and it could mean that TVs will become more expensive, especially at the lower end of the market.
The research firm said that it expects just 256 million LCD panel units to be shipped in 2021.
The lower forecast is partly due to a change of focus by panel makers, who are expected to reduce 43-inch panel production in favour of more 65-inch and 75-inch panels, which are proving more popular with consumers. Meanwhile, some LCD production capacity will be shifted to serve the IT monitor market, instead of TVs. Finally, both Samsung Display and LG Display are exiting the LCD market, further reducing supply, Omdia said.
The reduced LCD TV panel supply at the same time as “top tier TV makers” are expected to show more interest in LCD next year, prompting an unexpected shakeout of the market that will be to the detriment of low-end TV manufacturers, Omdia said.
That’s because the top 10 TV makers in the world, including Samsung, LG Electronics, TCL, Hisense and Skyworth, are planning to purchase a combined 100 million units of LCD TV panels next year, accounting for 86% of the world’s overall supply, up from 70% in 2020 and just 64% in 2018, Omdia said.
The increase in demand for LCD TV panels by premium TV makers comes amid a COVID-19 pandemic that has reshaped the industry, with TV sales rising worldwide due to lockdowns that are forcing people to spend more time at home. Omdia said the top TV markers are proposing “aggressive” plans to secure both competitive panel resources and their positions in a resurgent TV market. As a result, Samsung, LGE, TCL, Hisense and Skyworth are jointly asking for 10% to 15% more of the worldwide LCD panel supply in 2021.
With the increased demand, panel makers no longer have the capability to fulfill the demands of all of their customers. Omdia says they will likely prioritize “preferred top tier TV makers” who are able to sell TVs with more advanced features for a higher premium, at the expense of low-tier TV makers whose products have lower market value.
“This focus on the premium market will cause an industry shakeout in TV makers. The value of the entire TV supply chain will be improved accordingly,” Omdia said.
At the same time, LG Display and Samsung Display’s exit from the market means that Chinese LCD panel manufacturers will increase their share of the market from 54% this year to 64% in 2021, Omdia said.
Omdia supply chain research director Deborah Yang said that from 2021, Chinese panel makers will enjoy clear leadership in all respects. As such, LCD panel supply will be decided by fewer, but also stronger panel makers.
“This will worry some TV makers who used to enjoy supply chain bargaining,” Yang said. “When the panel supply falls short of the demand that comes with the skyrocketed panel prices in the second half of 2020, it will naturally pressure some low-tier TV makers.”
