As an indicator, Open Cell (semi-finished products without backlights, etc.) 32-inch large order discounts fell to around US$49 per piece in November, a 6% drop from the previous month. 55 inches also fell to about 152 dollars, down 2%. As Chinese LCD panel manufacturers increase production, the sense of oversupply is increasing.
The preferential prices for large orders of TV LCD panels rose from July to September when demand for commercial warfare increased at the end of the year, but fell again after October. The demand side seems to be demanding transactions below the recent lows in June.
China's large-scale panel manufacturers such as BOE Technology Group (BOE) have successively expanded their production capacity and are increasing the yield. The demand for large-size LCD TVs remains strong in China and the United States, but the supply of LCD panels exceeds demand.
Hiroshi Hayase, senior director of the British research company IHSMarkit, said on the price of LCD panels that "the possibility of maintaining a downward trend in 2019 is very high." For LCD panel manufacturers, it may become a factor in the deterioration of profitability.
The severe winter of the LCD panel industry continues. In addition to the narrowing of profits of LCD panel companies such as Jingdong Fang Technology Group Co., Ltd., China Star Optoelectronics, LGD and other LCD panel companies, China's Taiwanese panel company Chunghwa Picture Tubes has also recently announced that it has been forced to suspend production due to the debt crisis.
At the same time, BOE is continuously increasing its medical and flexible display services. A few days ago, BOE stated that its first digital hospital, BOE Hefei Digital Hospital, has obtained various qualifications and is expected to officially open clinics in the first quarter of 2019. Subsequently, BOE issued an announcement stating that it plans to build a sixth-generation AMOLED production line in Fuzhou, with a total investment of 46.5 billion yuan.
In this regard, industry analysts said that most of the price declines are LCD liquid crystal display panels, and flexible OLED liquid crystal display panels have not yet been widely popularized. BOE’s move may be to achieve curve overtaking by investing in flexible OLED display panels. As the medical business with the highest gross profit margin, as investment increases, the proportion of revenue in the later period may increase.
