The liquid crystal display (LCD) plant operating rate is expected to recover from next month which hit the bottom due to a decrease in TV demand. TV manufacturers are using up their inventories, therefore they have to resume on the LCD supply. A market research firm, Omdia, predicted on the 18th that the operating rate of LCD manufacturing plants in the global display industry would rise up to 73% in August. They are forecasting a rebound from the operating rate of 70% in June and 69% in July. The LCD plant operating rate was the lowest in 10 years since February 2019 (77%).
By July, the operating rate fell down to the 60% level due to falling TV and home appliance demand. Samsung Electronics focused on consuming their inventory of finished TV products. It is known that Samsung even temporarily suspended LCD purchases from global display manufacturers such as BOE, HKC, and Sakai SIO International.
The decline in LCD plant operating rate is due to the fading of the ‘COVID-19 special’. The global TV industry saved several months' worth of inventory as TV sales increased due to COVID-19. As the COVID-19 special disappeared, they focused on using inventory and reducing new orders.
As TV manufacturers used up their inventories, LCD operating rate is expected to recover up to 70% from August. It is expected that the supply of LCD TV to Samsung Electronics will resume and the operating rate of large LCDs will increase focusing on China. The operating rate in September is expected to remain at 77%, although it is not at the level of the previous year. Even if the global LCD plant operating rate recovers, South Korean companies plan to reduce production due to deterioration in profitability. LG Display has decided to reduce production of large LCD displays by up to 20% in the second half of this year. Samsung Display stopped the LCD business ahead of LG Display. On the other hand, Samsung Display and LG Display have decided to expand production of organic light emitting diodes (OLED) instead of LCD.
By Staff Reporter Ji-woong Kim jw0316@etnews.com