Most Taiwan-based LCD panel makers are likely to start incurring losses from the second quarter of 2018 ending their seven quarters of consecutive profit gains, as increasing output from China's 8.6G and 10.5G fabs will further weigh down TV panel prices, according to David Hsieh, a senior director at IHS Markit.
Moreover, the global flat panel industry is going to face oversupply of LCD panels in the next three years due to aggressive capacity ramps by China's makers, Hsieh made the remarks at a conference on Taiwan's display industry hosted by IHS Markit in Taipei from April 19-20.
By 2020, China will have a total of 19 8G and more advanced fabs engaged in the manufacture of large-size panels as well as 20 5.5G or higher-generation fabs for the production of small- to medium-size panels, according to IHS Markit.
Having been set on a downward spiral since the second half of 2017, panel prices continued to slide 1-2% on average in the first quarter of 2018 and should fall another 3-5% in April, Hsieh estimated.
Some panel makers already incurred losses in the first quarter of 2018 and will feel more pressure in the second quarter, Hsieh added.
Taiwan's AU Optronics (AUO) said it will hold an online investors conference on April 26 to outline its prospects for the second quarter.
China-based BOE Technology has ramped up its yield rate at its first 10.5G line to 50% recently, Hsieh indicated, noting that the 10.5G line, which focuses on production of 65-inch TV panels, will be able to reach its full capacity of 120,000 glass substrates a month by mid-2019.
Meanwhile, CEC-Panda LCD Technology will have two new 8.6G plants start official runs in 2018. Coupled with the capacity at its Nanjing plant, CEC-Panda will boost its annual panel shipments also to 11-12 million units in 2018 from around seven million in 2017, Digitimes reported earlier.