The supply and demand of the global flat panel industry will remain roughly in a balanced state in 2018, as the business climate for the industry is expected to hit bottom at the end of the second quarter before rebounding in the third quarter, according to Michael Tsai, president of AU Optronics (AUO).
As for the short-term prospects of TV panel prices, the pace of declines in March will be faster than expected, as sales of TVs in China during the Lunar New Year period lagged by a double-digit rate as compared those sold a year earlier, Tsai noted, adding that TV vendors are also conservative about purchasing panels in latter half of the first quarter.
Prices of 32-inch TV panels are expected to dip US$3 on average in March compared to a drop of US$2 in February; 40-inch models will slip by US$3-4; and 43-inch panels will continue to drop by US$5, according to market sources.
Price reduction of 55-inch panels will widen to US$3 in March compared to a reduction of US$1 in the previous month, while 65-inch models will drop by over US$10 in March due to oversupply, the sources added.
AUO chairman Paul Peng believes that oversupply will become the norm of the global flat panel industry starting 2019 judging from the pace of new investments in expanding production capacity by China-based panel makers.
To counter the massive capacity ramps by China-based competitors, Peng said, AUO will continue to make smart investments to maintain its production capacity at a proper level, while further enriching its product portfolios and innovation.
Excluding newly installed production capacity, overall productivity at AUO has increased by 20% in the past five years, resulting from the upgrades in manufacturing technology and equipment, Peng indicated.
AUO has also deepened its developments in large-size TV panels, including 65-, 75- and 85-inch sizes, particularly the 65-inch models, and will continue to advance into the high-end segment, Peng said.
AUO is also expanding its capacity. The company is currently implementing the second-phase expansion of its 8B (8.5G) fab in central Taiwan. The total production capacity of the 8B fab will increase to 102,000-107,000 substrates a month in the second half of 2018, up from the current 77,000 units.
Including its 8A fab, AUO's 8.5G lines have a total production capacity of 150,000-160,000 substrates a month currently.