According to the latest report from research firm Omdia, the overall capacity utilization rate of display panel factories in Q1 2024 is expected to drop below 68% due to the slowdown in end demand at the beginning of the year and panel manufacturers reducing production to protect prices.

Image: Latest forecast for monthly production line utilization rate of display panel manufacturers

During the "Black Friday" in North America and "Double 11" promotion in China at the end of 2023, TV sales fell short of expectations, resulting in a large inventory of TVs carrying over to the first quarter of 2024. This has increased price pressure from TV brands and retailers. Alex Kang, Chief Analyst at Omdia, stated that panel manufacturers, especially Chinese manufacturers who accounted for 67.5% of LCD TV panel shipments in 2023, are responding to the situation by reducing capacity in the first quarter of 2024. This production reduction can stabilize the prices of LCD TV panels.

The three major panel manufacturers in China, BOE, CSOT, and HKC, plan to reduce production capacity in the first quarter, especially during the Chinese New Year holiday period in February, extending the production suspension from one week to two weeks. Therefore, the average capacity utilization rate in February is only 51%, while other manufacturers are around 72%.

Monthly production line utilization rate of the three major panel manufacturers in mainland China (BOE, CSOT, HKC) and other companies

The institution states that with the decrease in early demand and previous inventory carryover, LCD TV and display screen buyers believe that prices will continue to decline until the inventory is cleared. The launch of new products in 2024 can help revive demand. The institution believes that Chinese panel manufacturers are more confident in preventing further price declines compared to the industry, and with the positive outlook for Chinese manufacturers, LCD TV display panel prices are expected to rebound.

As one of the top 10 professional display manufacturers, Perfect Display will closely monitor fluctuations in the industry's price chain and adjust the pricing system for products, including gaming monitors, business monitors, large interactive whiteboards, and CCTV monitors, as needed.