Market Insight

TV panel inventory level to remain healthy amid strong TV panel demand

November 20, 2014

Alex Kang Alex Kang Principal Analyst, Display Outlook

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TV panel inventory level to remain healthy amid strong TV panel demand

 

Alex Kang and Kacie Cavanaugh

 

Key Takeaways

  • TV panel production by area will surpass the area shipment in the fourth quarter of 2014 for the first time since the third quarter of 2013.
  • TV panel makers’ accumulated inventory will slightly increase as a result.
  • However, TV panel inventory will remain under the four-week normal level as TV panel demand remains strong.
  • TV panel prices will continue to rise until the end of 2014, as the panel supply remains tight and inventory weeks stay below normal.

 

Moderate inventory levels, year-end seasonal demand, and pre-stocking to boost TV panel demand

 

IHS forecasts that the TV panel accumulated inventory will rise slightly in the fourth quarter as production will exceed shipments, by a small degree, for the first time since the third quarter of 2013 However, the panel inventory level will remain below normal, at less than 4.0 weeks, because demand exceeded the supply significantly in the second quarter, and the fourth quarter panel supply will remain tight with production just barely exceeding shipments.

 

Total TV panel demand stays strong, and the utilization rate at 7G and higher production lines will continue to run above 90% in December

 

TV panel inventory levels at set makers will remain healthy in the fourth quarter, so pre-stocking will drive demand amid concerns over a tight supply, along with rising prices due to year-end and Chinese New Year seasonal demand. As a result, utilization rate at panel makers will be higher than usual in December and will stay above 90% until the end of the year.

 

Given panel makers’ aggressive production plans for the fourth quarter, in terms of area, the total TV panel production is projected to exceed shipments for the first time since the third quarter of 2013, by 1.5%. Accumulated inventory is expected to reach 7.5 million square meters, up 6.1% from the end of the third quarter. As a result, accumulated inventories and inventory levels will only slightly build up during the period, but remain healthy.

 

The inventory level at the panel makers is expected to increase by 0.6 week in the fourth quarter, but the level will remain below normal at 3.6 weeks, so it is unlikely to result in an oversupply of TV panels.

 

TV panel prices are unlikely to turn lower until the end of the year

 

Given the healthy inventory levels and strong TV panel demand, prices will continue to increase until the end of this year. Normal year-end seasonal demand for panels will fizzle out by November, but TV makers plan to purchase more panels in December compared to a year ago. In addition, demand from Chinese TV makers will continue into December ahead of the Lunar New Year holiday shopping season coming in mid-February.

 

These findings are available in the report entitled, “LCD Industry Tracker - TV- World” from the Display service of IHS Technology.

 

 

Geography
Asia
Research by Market
Displays
Category
Large Displays
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