The industry was worried that IT application panels such as notebook computers and personal computer screens have been going strong since the second quarter of this year, and the temperature may begin to gradually cool down in the fourth quarter. Now it seems that this concern may be unnecessary. Due to the new crown pneumonia epidemic in various parts of the world so far, the demand from the home economy such as working from home, remote teaching, and online entertainment still provides a stable momentum for the IT product market.
In fact, the two major factors of supply and demand, coupled with the production capacity allocation of IT application panels and TV TV panels by panel manufacturers, have also formed interlocking support for the entire TFT LCD panel market. Panel manufacturer AUO Optoelectronics, Innolux, and Caijing have all turned losses into profits in the third quarter of this year.
The two major panel factories in South Korea have successively closed some TFT LCD panel factories, faded out or stopped producing some large-size LCD liquid crystal panels, which is one of the most important factors affecting the supply side of panel factories this year. Although China's newly opened high-generation LCD production lines continue to increase the production volume and utilization rate, the subsidy policy from the government has gradually limited and promoted industrial consolidation, which indirectly slowed the expansion plan of China's panel makers .
Coupled with the rapid release of demand for related products driven by the epidemic, the supply of some key components, such as driver ICs, is in short supply. With the reduction of large-size panel production in South Korea, the slowdown of China's production expansion plan, and the tight supply of key component ICs, the overall supply of large-size panels is under control, forming favorable supporting conditions for panel prices.
According to estimates, Samsung plans to close the 7th and 8th generation lines and the Suzhou plant, which together account for about 13% of the global large-size TFT LCD panel production capacity. LGD will transfer more TFT LCD production capacity to OLED panel production, which will also affect The global production capacity of large-size LCDs is about 10%. The reduced production capacity of the two major panel makers in South Korea has offset the new production capacity recently opened by China.
After the Chinese panel manufacturer BOE merges with Panda, BOE will have a global market share of 25% in 2020 and 28% in 2021. A more concentrated global panel production capacity should also help stabilize the order of the panel industry.
In terms of demand, the epidemic has changed consumption patterns and lifestyles. The demand for working from home and studying at home, distance teaching, online shopping, online entertainment, and smart medical care has increased instantly, whether it is purchased by the public at their own expense, corporate subsidies, or educational purchases. The bids have driven the growth of demand for IT products such as tablet computers, notebook computers, and personal computer screens.
Among them, notebook computers are one of the electronic products that have benefited the most from this wave of epidemic demand because of their portable convenience and powerful functions. Although the growth rate of personal computer screens is not as good as that of notebooks, it is estimated that the annual shipment volume will increase slightly compared with last year or challenge the 5% growth rate.
The original industry believes that the demand for IT products has been strong since the second quarter of 2020. After the demand is saturated, it may start to slow down in the fourth quarter. Unexpectedly, the fall and winter epidemics around the world have not calmed down, and the situation in Europe and the United States has not improved. Manufacturers believe that this wave of IT demand in the housing economy seems to have a chance to continue until the end of the first quarter of next year.
Controlled supply and rising demand, coupled with supply chain issues, and the squeezing of the production capacity of different application panels, have created a mutually beneficial environment for recent panel quotations. Because the price of TV panels has risen and IC supply is tight, if the price of IT panels does not rise, panel manufacturers are unwilling to arrange more production capacity to produce IT panels, resulting in continued tight supply of IT panels.
The market expects that in the short term, notebook computer panel prices will continue to rise slowly until March 2021. Minitor panel prices have also recently been supported. As for TV panel quotations, there is also a chance to maintain a trend of easy rise but difficult decline. The actual situation requires continuous observation of the development of the epidemic and changes in supply and demand.
