AU Optronics Corp (AUO, 友達光電) and Innolux Corp (群創) should swing back into the black this quarter, joining their peers in benefiting from a V-shaped recovery as panel prices surged up to 40 percent quarter-on-quarter, consulting group Omdia said yesterday.
That would be positive news for AUO and Innolux, which have been struggling to eke out a profit over the past five to six quarters as Chinese panel makers ramped up capacity and locked prices into a downward spiral.
However, the COVID-19 pandemic unexpectedly stimulated TV sales in the first half of this year, especially in North America, Europe and China, Omdia senior director David Hsieh (謝勤益) told reporters on the sidelines of an annual display forum in Taipei.
Photo: CNA
“TV vendors were originally very pessimistic about TV sales this year, given the fallout from the pandemic on the global economy,” Hsieh said. “But, to their surprise, consumers are spending more on TVs, rather than buying mobile phones.”
As a result, TV vendors have boosted panel display orders significantly this quarter and are stocking up for the second half of this year, Hsieh said.
The buying spree triggered a sharp price hike in TV panels last month, which is likely to carry into this month, he said.
“Prices for almost all TV panels are to increase US$5 to US$10 per unit in July alone. This is a very strong price increase,” Hsieh said. “With such a price hike, all panel makers should return to the black in the third quarter.”
This quarter as a whole, TV panel prices are expected to jump 30 to 40 percent quarter-on-quarter, Hsieh said, adding that such a spike “has never been seen before.”
PC and monitor panels have been showing vibrant demand amid the pandemic, thanks to an increase in people working from home and the demand for home entertainment due to lockdowns, the researcher said.
Omdia expects panel prices to start falling next quarter, when demand is expected to diminish.
Panel makers should expect supply constraints next year, it said, adding that global supply capacity is only expected to grow 1 percent year-on-year, because Samsung Electronics Co and LG Display Co plan to shut large-panel manufacturing fabs, while panel demand is expected to increase 10 percent.
The US-China trade spat is likely to spur demand for OLED panels next year, Omdia said.
Due to an export ban imposed by the US, Huawei Technologies Co (華為) would likely be forced to use MediaTek Inc’s (聯發科) less-advanced chips in its smartphones, instead of the high-end processors designed by its subsidiary HiSilicon Technologies Co (海思), Hsieh said.
Huawei might replace LCD panels with advanced OLED panels in most of its smartphones to enhance their specifications, he added.
OLED panel shipments are expected to fall 1.2 percent annually to 465 million units this year, rather than increase 8.92 percent, as it estimated before the outbreak, Omdia said, adding that the decline could be attributed to sagging demand for premium smartphones, which are usually outfitted with OLED panels.
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