Large panel overcapacity, it capacity allocation continues to increase
Although the global market demand is low in 2019, the panel production capacity of high generation line is still increasing, and TV is more and more difficult to shoulder the dual burden of panel factories in terms of production capacity and profitability. Therefore, panel factories are considering to reduce the turnover rate and increase the IT application (monitor & notebook) in order to reduce the operating pressure. According to sigmaintell, it production capacity began to grow in the second quarter of 2019, and the capacity allocation of IT application in large-size LCD panel production capacity reached 15.2% in the third quarter. In the global economic environment continues to downturn, panel shipments continue to decline, how can it consume excess capacity? First of all, it is not difficult to think of large-scale, but what are the changes in the size structure? In the large-scale trend, where is the bottleneck of development?
Y2017-2019 global IT application in large size LCD panel capacity allocation supply trend (%)
Human eye comfort distance
The display belongs to the desktop display application, which means that the distance from the human eye to the display screen is about 50cm. Referring to the recommended size of UHD TV, the recommended screen size is 50 inches at this distance. Therefore, the maximum mainstream size of the display panel is 49 inches. The larger the size is, the more comfortable it may be for the human eye.
Relationship between screen size and display distance (UHD TV)
The average size is gradually improved, and the mainstream size is centralized
There is no doubt that the average size of the display panel is gradually increasing. According to sigmaintell, the average size of the display panel will increase from 20.3 inches in 2011 to 23.8 inches in 2019. Tracking the change characteristics of the panel size structure, we can find that:
1) The speed of large-scale is slow: Although small-scale is shrinking year by year, the market share of small-scale is still relatively strong supported by B2B market demand; The 23. X inches are growing as a whole; The large size of 28 inches and above increases steadily, but there is no qualitative change in the short term;
2) Mainstream size centralization: as the display becomes more and more mature, non mainstream sizes are gradually eliminated, and the proportion of several mainstream sizes increases from 83.5% in 2015 to 89.3% in 2019;
3) The highest market share of single size is 30%: the highest market share over the years is 21.5 inches, less than 30%.
Market share trend of main sizes of global display panels during y2015-2019
Big growth opportunities
The growth space of large-scale display is closely related to the increasing maturity of demand, usage scenarios and upstream and downstream supply chains. Under this influence, sigmaintell believes that the growth space of large-scale display will be greatly increased in the next few years. The main reasons are as follows:
1) The pull of high resolution to large size. Resolution and size complement and promote each other. With the growing demand for diversified scenes represented by e-sports, business and finance, consumers’ demand for display image quality has been rapidly upgraded, and the demand for high-resolution products has shown a strong growth in recent years. According to sigmaintell, in 2019, the global shipment of high-resolution (QHD and above) display panels will reach 13.5 million units, a year-on-year increase of 45.2%, of which 80% are 27 inch and above.
2) E-sports demand for large-scale pull. With the rapid development of e-sports industry in the global and Chinese markets, the demand for E-sports displays is growing at a high speed. According to the prediction of sigmaintell, in 2019, the global electronic competitive display panel shipment will reach 9 million units, with a year-on-year growth of 48.2%. At present, the main dimensions of E-sports are 23.6 inches, including 24, 27, 32, 34 and 37.5 inches. Considering the perspective and reaction speed of e-game players, professional e-game products are mainly 24 inches, while ordinary e-game players will consider larger e-game displays. According to sigmaintell, in the current E-sports display panel, the large size of 27 inches and above accounts for 55% and is growing.
3) The demand growth of curved display. With the increasing awareness of curved surface display by consumers and ordinary e-game players, the growth of curved surface display has also driven the growth of large size in recent years. According to the prediction of sigmaintell, the global curved display panel shipment will reach 10.5 million units in 2019, with a year-on-year growth of 58.7%. The main dimensions of curved surface are 23.6, 27, 32, 34 and 37.5 inches. According to sigmaintell data, in the current curved surface display panel, the large dimensions of 27 inches and above account for 79% and are increasing.
4) Changes in the pattern of supply chain will also promote large-scale growth. In 2019, the total share of the mainland display panel will reach 33%, especially for 23.8 inches. At present, the volume of Chinese mainland manufacturers has surpassed Korean manufacturers. The competition in the upstream supply chain has led to a drop in prices. From the beginning of 2018 to the end of 2019, the average prices of 23.8 inches and 27 inches fell by about 20% respectively. At present, the 27 inch panel manufacturers in mainland China still lag behind those in Korea and Taiwan, and need to accumulate more core technology and experience in the future.
5) A new round of replacement demand in China’s commercial market will promote the acceleration of large-scale: with the gradual implementation of “safety independent and controllable” demand, according to sigmaintell’s “China display commercial market report”, the focus of replacement demand will gradually shift to 21.5-inch and above, and the traditional 18.5-inch and 19.5-inch demand will drop sharply. With the deepening of the demand project, the main supporting force of small-size display demand will disappear.
It can be seen that each subdivision field of the display will have a more obvious pulling effect on the large-scale in the future. With the growth of the subdivision field, the acceleration of large-scale is an inevitable process.
Market share and trend of major size segments of y2019 global display panel
When will medium and large size enter the mature stage?
The development of any new technology has a life cycle, which is divided into four stages: introduction, growth, maturity and decline. As mentioned above, the small size of display is in the decline stage, and the medium and large size is in the growth stage. When will it enter the mature stage?
Sigmaintell believes that the indicators to judge the mature market are: technology maturity, demand maturity and whether it is a buyer’s market. If the demand tends to be stable and enters the buyer’s market; The technology tends to be mature and the space for cost reduction is limited; The pricing is stable or declining and can not achieve profitability; If the competitors are stable or decrease, it can be judged that the product or technology has entered the mature period.
By these standards, the 21.5-inch and 23.8-inch markets are mature, even in the Red Sea stage. Although the total demand of 21.5 inches is declining, the main demand is the domestic market. On the one hand, it is driven by domestic Encore demand, on the other hand, it will erode the small size below 21.5 inches, so the decline rate will slow down in the next two years; 23.8-inch is a general-purpose product. Although there will be growth in the future, the growth rate will decrease and the market will be saturated; The 27 inch positioning covers the low, medium and high end, and the user groups are more diversified. With the growth of segmentation, there is still room for growth in the future; 30 inches and above are mainly Internet cafes, E-sports and high-end commercial markets. In the future, it will be mainly accompanied by the development and stable growth of game large screen market.
Therefore, in the future, the large-scale display panel will accelerate, and the growth can be expected. However, due to the characteristics of desktop display, if we hope to consume too much production capacity through size iteration, it may accelerate the development of the display industry. Therefore, sigmaintell suggests that panel manufacturers should shift the focus of capacity allocation and technology development to products with growth period, avoid the Red Sea market, and constantly improve their technical capabilities to meet the needs of users in diversified application scenarios.
Editor in charge: GT