Omdia's latest report suggests that display panel manufacturers are set to reduce their fab utilization by 14pp quarter-over-quarter, reaching 68% in October 2024. Leading Chinese LCD manufacturers will spearhead this reduction, planning to suspend LCD TV panel production for one to two weeks during the National Day holiday.
In October 2024, the combined monthly average utilization rate for China's top three panel manufacturers - BOE, China Star, and HKC Display - is expected to drop to 61% during the production control process, according to Omdia. These companies significantly influence the overall LCD TV panel market due to their substantial market share.
In the first half of 2024, these three panel makers held a combined share by area exceeding 60% in the LCD TV panel market, Omdia noted. Other panel makers have maintained more stable monthly average utilization rates, ranging between 75% and 82% throughout 2024.
Chinese panel leaders aim to adjust their output in response to the anticipated monthly decline in LCD TV panel prices, which is projected to continue until mid-fourth quarter. They expect that production control will either halt or mitigate the price decline.
Panel manufacturers plan to modify inventory levels by reducing utilization rates, as TV set manufacturers are likely to avoid aggressive year-end marketing promotions later this year. This is due to rising costs, including LCD TV panel prices, and weaker-than-expected TV sales during China's 618 promotions and global sports events.
"Panel makers successfully increased panel prices after reducing their utilization rate to 56% in February 2024, and continue to follow production-to-order strategies, where panels are produced only after receiving confirmed customer orders," said Alex Kang, principal analyst in Omdia's display research practice. "Even after the fab utilization cut in October, there's a high likelihood that panel makers will implement significant production control when panel prices are set to drop or inventories are about to rise. Some panel makers are already considering repeating the utilization cut during next year's Lunar New Year holiday."
