Shulou(Shulou.com)11/24 Report--

CTOnews.com November 18 news, according to Omdia agency report, due to the further restructuring of Korean LCD TV panel (LCD) production capacity, it is expected that in 2023, two Korean panel manufacturers, Samsung Display and LG Display LCD TV panel supply will drop by 14 million compared with 2022. LG is expected to ship 18 million units in 2022, but considering further capacity restructuring plans in South Korea and China, its LCD TV panel business target for 2023 will be further reduced from the original plan of 12 million units to only 7 million units.

The report pointed out that fierce competition in LCD TV panel Open Cell manufacturing and deterioration of LCD TV panel manufacturing profit margins continue to prompt Korean panel manufacturers to change their strategies.

Samsung Display sold its 8.5 generation LCD TV panel production line in Suzhou, China in 2021 and completely stopped its domestic LCD TV panel production in 2022. This means that in addition to some panel inventory in 2022, Samsung Display will no longer ship new LCD TV panels in 2023. Currently, the company shipped 4.3 million units in 2022, but mainly to its affiliate Samsung VD. CTOnews.com learned that LG Display's financial performance deteriorated in the third quarter of 2022 due to the price collapse of LCD TV Open Cell, LG Display decided to take further measures to restructure LCD TV panel production capacity, including shifting more domestic Korean and the mainland of China production capacity to IT panel production.

Although LG shows that it expects shipments to reach 18 million units in 2022, in addition to further advancing LCD TV capacity restructuring plans in South Korea and the mainland of China, the company will also reduce its business target for 2023 from 12 million units previously planned to only 7 million units. LG Display is the main LCD TV panel Open Cell supplier to its affiliate LG Electronics (LGE). Therefore, Samsung Electronics had planned to buy more LCD TV panels from LG Display to balance purchases between different suppliers and prevent excessive dependence on the mainland of China panel manufacturers, but the plan may be affected by the LG display plan change.

LG Display said that due to serious oversupply problems, LCD TV panel Open Cell prices have fallen below the cash cost of panel manufacturing, so efforts are being made to restructure and shut down more LCD TV panel capacity to improve losses. Due to these challenges in panel pricing, LCD TV panel production is not expected to be profitable in the coming quarters. At the same time, LG Display intends to shift more resources to OLED panel production, including its TV, mobile phone and new OLED IT business.

Considering its financial results announcement for the third quarter of 2022, Omdia expects LG Display to accelerate its LCD TV panel capacity restructuring and shutdown plan. Overall, LG Display is expected to further lower its 2023 shipment target of 12 million LCD TV panels to just 7 million.

If the expected schedule goes ahead, LG Display's Korean line will no longer supply LCD TV panels from 2023, while only its Guangzhou line will supply them. Starting from the second half of 2023, the LCD TV panel capacity allocated by these production lines will be only 100,000 substrates per month. The product mix will also change dynamically. With the restructuring and shutdown of the P7 production line, the supply of 43 and 50 inch panels will be phased out, while with the restructuring of the P8 production line, the supply of 55, 65, 86 and 98 inch panels will be significantly reduced. At the same time, Guangzhou production line will mainly produce 55, 65 and 75 inch panels.

According to Omdia's analysis in Display Panel Dynamics-September 2022: Display panel manufacturers are targeting 254.3 million LCD TV panels to ship in 2023, an increase of only 1% over 2022, and LCD TV panel manufacturers plan to ship 254.3 million in 2023, including LG Display's expected shipments of 12 million. But LG Display is likely to lower its 2023 target to 7 million units, which would bring LCD panel shipments in 2023 down to an estimated 249.3 million units.

LG's active capacity restructuring and shutdown plan may not only be a decisive factor affecting LCD TV panel supply and demand in 2023, but also a key indicator for the mainland of China panel manufacturers to further dominate supply capacity.

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