Specialists at WitsView, a research division of TrendForce, claim that the excess of LCD TV panels in 2019 led to a significant drop in prices. Panel makers hoped in 2020 to transfer excess capacity to the production of panels for monitors, and Samsung Display (SDC) had extensive plans in this regard. However, under the influence of the COVID-19 pandemic, the forecast regarding the demand for end devices became pessimistic. SDC has already informed its customers that it will stop producing liquid crystal panels by the end of the year. TrendForce experts expect this to lead to major changes in the monitor panel market.
Previously, SDC plans for the production of monitor panels were as follows: to produce IPS panels in the Gen 7 factory and curved VA panels in the Gen 8.5 factory in Korea, and in the second half of the year to transfer the VA production to the Gen 8.5 factory in China. This step would benefit from lower taxes on domestic sales in the Chinese market, where curved panels are more popular than in European or US markets.
SDC closed the L7-1 Gen 7 factory in 2017 and redesigned it to produce more profitable OLED panels for smartphones. SDC is currently underrepresented in the IPS monitor panel market, where it occupies only 9%. Therefore, the company’s decision to close L7-2, another of its Gen 7 factories, to make room for the production of additional OLED panels for smartphones, seems rational.
On the other hand, occupying 35% of the VA panel market and more than 70% of the curved panel market, SDC is the undisputed leader in these markets. Turning to the production of QD-OLED, SDC creates the conditions for the redistribution of these markets. AUO and CSOT will take advantage of this – only they, in addition to SDC, produce curved VA panels.
Initially, TrendForce predicted an excess of supply over demand in the monitor panel market in 2020, as it was expected that supplies would increase from last year’s 143.8 million units to 170.1 million units. However, SDC’s decision to exit the market can eliminate the imbalance.