As large-sized LCD Displays go into situation where there is excessive supply starting this year, it is predicted that there will be a decrease in performance of Korea’s Display businesses in second half. Main reasons are decrease of panel’s unit price due to excessive supply and increase of stocks due to slump of TV set businesses. As total stock of panels in first half reach its maximum in 3 years, forecast for long-term market is pessimistic.
According to stock and relevant industry, it is predicted that Korea’s Display businesses will greatly fall short from expected performance due to decrease of panel’s price this year. It is also predicting that continuation decrease of LCD TV panels’ price will last until the end of this year.
HI Investment & Securities announced that stock is increasing because sales volume for LG Display in emerging markets in Europe and South America during the first half of this year decreased more than 10% compare to the same time last year. It is predicting that this year’s business profit for LG Display will stay at 1.9 billion dollars (2.1 trillion KRW) due to slowdown of demand for LCD TV. Shinhan Investment is also predicting that price for 32-inch Open Cell will continue to decrease until the end of this year due to excessive supply of LCD panels. It is forecasting that this year’s business profit for LG Display will reach 1.7 billion dollars (1.9 trillion KRW). Although this is a bigger growth compared to same time in last year, it is a more than 20% decreased compared to initial observed value.
Other stock firms are also predicting that performance of Display businesses will be in a slump due to decrease of profitability of TV field.
Total stock of LG Display’s panels is increasing. Difference between numbers of panels in stock compared to panels that are being shipped increased 22% in first half of this year, which is the greatest in 3 years. Although it was 13% during the first half of 2013, panel’s price fluctuated due to shortage during the second half. The difference fell from 10% during the first half of 2014 to 5% during the second half, which helped improve performance level. However total stock rapidly increased as the difference surpassed 20%, and there are lots of concerns about performance getting worse as there are predictions about absence of motive for growth in the second half.
Situation for Samsung Display is just the same as LG Display. Industry is explaining that Samsung Display has a lot of stock of TV sets and possesses lot of Open Cells. Total stock of rigid small and medium-sized OLED panels continues to get worsen.
“Korea’s Display businesses planned to sell more than 20% of TV panels compared to last year. However as the demand only increased slightly about 5%, their slumps in performance levels were unavoidable. As pressure on lowering unit price for car displays rises, which they are pushing as new business, it is predicted that it will be hard to improve performance level in the second half of this year. Actually early 2016 will be most serious and critical when there is a plan to build extension for production capacity in China.” A person affiliated in this industry said about difficulties to improve performance-level in upcoming months.
Staff Reporter Sung, Hyeonhee | sunghh@etnews.com