According to TrendForce investigations, global TV shipments will reach 47.26 million units in 1Q22, down 20% QoQ. Driven primarily by the Russian-Ukrainian war, prices of raw materials such as crude oil and natural gas have risen, while the recent breakout of the Omicron strain of the pandemic in China has incited repeated no warning attempts at enacting dynamic zero-COVID, which has hindered the flow of logistics, hiked freight rates, and taken as a whole, exacerbated existing global inflation woes. Consumers with limited disposable income have started to cut back on non-essentials with TV sales bearing the brunt. Looking at the three major TV sales regions of North America, Europe, and China in 1Q22, high inflation in Europe and the United States has led to a sharp 20% drop in demand. In China, due the festering pandemic, numerous cities have been locked down, while unemployment is spiking, logistics are impeded, and prices soar. TV product sales are at a complete disadvantage and the demand in 1Q22 dropped by 15~20%.

TrendForce further points out, originally Chinese brands banked on low 2Q22 panel prices and not being required to shoulder expensive shipping costs in the domestic market, expecting that the 618 anniversary promotional period would inject fresh enthusiasm into the market and boost annual shipments. However, now that China’s TV sales are disrupted by the pandemic, any hope riding on TV brands’ only large-scale promotional event in the first half of the year may have been dashed. In addition, Q3 was when brands stocked up in previous years for Black Friday and Christmas season promotions in Europe and the United States. However, this year’s FIFA World Cup was postponed to November, resulting in overlapping promotional schedules, which may curb sales. Ocean freight remains expensive this year, with additional costs increasing with greater item size, which is not conducive to the rollout of branded manufacturers’ large-scale promotional activities in 2H22. Therefore, TrendForce estimates that this year’s TV shipments will drop further to 212 million units, for an annual growth of only 1%, and there exists additional potential for downward risk.

Demand in Europe and US misses estimates, international brands drop orders, and 2Q22 decline in TV panel prices expands further

The top two leading TV brands, Samsung and LG Electronics, are mainly sold in North America and Europe. Therefore, since TV sales in Europe and the United States declined by 20% in 1Q22, this had the greatest impact on these two leading brands. Samsung Electronics shipped 10.9 million TVs in 1Q22, down 3.1% QoQ while LG Electronics shipped 6.53 million TVs in 1Q22, down 11.8% QoQ and down 6.4% YoY. Affected by weak terminal demand, the two major brands revised their panel purchase orders in late March. Samsung’s purchasing volume in 1Q22 was revised down 7.5% and fell by 9.5% in 2Q22. LG Electronics primarily focused on reducing purchase orders in 2Q22 and purchasing volume decline is expected to exceed 20%.

TrendForce specifically states, major international manufacturers have recently revised their orders in succession. Although Chinese brands have yet to see a significant reduction in orders, if 618 promotions are disappointing, it cannot be ruled out panel procurements will begin to fall in mid-to-late Q2. Although branded manufacturers significantly revised TV panel orders downward in 2Q22, panel manufacturers have not seen a significant reduction in utilization rate, which will depress the price of panels below 55 inches (inclusive) in a sustained freefall while the prices of large size panels above 65 inches (inclusive) will continue to deteriorate.

Samsung Electronics delays launch of WOLEDs, styming 2022 OLED TV shipment performance

This year, the supply of OLED TV panels has benefited from LG Display’s expanded production capacity of 8.5-generation OLED TVs in Guangzhou. As supply increased, LG Display also improved product specifications and prices, but this led to Samsung Electronics delaying the verification and launch schedule of white OLED products. Not only has Samsung Electronics’ 2022 market share of OLED TVs shrunk from 15% at the beginning of the year to 6.4%, but global OLED TV shipments will be revised down to 7.79 million units this year, with an annual growth rate of 17%.

Continued oversupply in the LCD display industry has led to a decline in the YoY profitability of panel manufacturers. As one of the key countries leading the technological development of the global display industry, Korean panel manufacturers took the lead in announcing a cutback in LCD TV products and a transition to OLED distribution.

The capacity of OLED large generational fabs building gradually, market share seized through slight price reductions

In 2021, the production capacity of LG Display’s Gen8.5 line in Guangzhou and Paju, South Korea continued to climb, obviously contributing to an increase in shipments. In addition, as OLED pricing dipped and LCD pricing advanced, the price gap between OLED TV panels and LCD panels diminished to a multiple of 2.5 in January, with the differential narrowing to a multiple of 1.8 by the middle of the year. In addition to the dwindling price divergence, OLED TVs are positioned as high-specification products, priced higher than ordinary LCD TVs at retail. After the contraction in profits posted by LCD brands, these companies delved industriously into the OLED market, driving growth in annual shipments of OLED TV up as much as 70.8% to 8.0 million units.

Supply completely dominated by Korean panel manufacturers, the trend will change in 2024 at the earliest

As an industry leader, LG Display officially began mass production of white OLED TV panels in 2017. LG Display’s hold on the exclusive supply of OLED products was broken after Samsung Display officially mass-produced QD OLED TV panels at the end of 2021. However, due to differing technologies, LG remains an exclusive supplier in the realm of white OLED TV panels.

In terms of Taiwanese manufacturers, AUO and Innolux have focused on the rollout of Mini and Micro LED panels but have not put much effort into large generational fabs for OLED panels. Japanese panel makers Sharp Display & SPDG likewise have not given OLEDs much thought. In terms of Chinese panel makers, although these companies are actively building small and medium generational fabs for OLED panels, the rollout of large generational fabs for OLED panels is still relatively slow. Therefore, the entire market structure may need to wait until 2024, when TCL’s T8 Gen8.5 inkjet OLED production line hits heavy volume before there is a chance to see any changes. However, according to the capacity observation currently planned by TCL, overall supply will be quite limited in the initial stages. Although HKC’s Changsha plant has a planned production capacity corresponding to a large generational fab for OLED panels, there is no clear plan for a specific mass-production timeframe. Thus, TrendForce expects that Korean panel makers will remain the vanguard of the trend towards OLED TV panels in the next 3 to 4 years.

（Image credit: Unsplash）

The shipment performance of TV brands in 1H21 benefited from COVID-19 economic relief funds in the U.S., driving a continuing boom in North American shipments, according to TrendForce’s investigations. At the same time, TV brands continued to replenish panel inventories, pushing up panel prices. As the pandemic slowed down in Europe and the United States in 2H21, life returned to normal and pandemic stimulus no longer applied, challenging demand levels. In addition, rising raw material and freight prices pushed up whole device cost, forcing TV brands to pass costs onto retail pricing. Even though TV brands staked their hopes on the two major annual yearend sales promotion events of Singles Day in China (the biggest shopping day of the year globally, online and IRL) and Black Friday, sales performance was poor due to high costs leading to a slump in end-user demand and eventually causing TV shipments to decline by 3.2% annually to 210 million units in 2021.

TrendForce further indicates that panel supply and overall production capacity will be ample in 2022, dispelling severe TV panel price fluctuations while ushering in steady and moderate fluctuations as a replacement. After a sharp revision in TV panel prices in the 2H21, this year’s panel pricing is more advantageous to the planning of TV brands. In addition, the severe impact of the pandemic in Southeast Asia and emerging markets and high panel prices last year caused TV brands to reduce the scale of small-sized 23.6-inch, 32-inch, and 43-inch products, forcing a deferral of demand. In 2022, the pricing of small-sized panels will be close to panel manufacturers’ cash cost which will help TV brands recapture a larger proportion of small-sized panel shipments. The proportion of shipments below 39-inch will remain at 25%, medium-sized 40~59-inch panels will remain at 55%, and large-sized panels above 60-inch will remain the focus of international brands with market share expected to rise to 20%. Benefiting from the deferral of small-sized panel demand, TV shipments in 2022 will grow by 3.4% to 217 million units.

OLED TV growth to slow down in 2022, annual growth rate to settle at 27%

In 2021, OLED TVs benefited from soaring LCD prices in the previous two years. This was also the case with 55-inch 4K O/C products. The price difference between the two has narrowed from a multiple of 4.7 in early 2020 to 1.8 in mid-2021, thereby incentivizing more TV brands to switch to producing OLED TVs when LCD panel supply is limited and driving OLED TV shipments to 6.7 million units in 2021, or 70% growth YoY. Although Samsung Electronics intends to join the white OLED camp and simultaneously launch QD OLED TVs this year, the continuing falling pricing of LCD panels and the price of OLED TV panels (subject to LG Display’s strategy of increasing pricing as opposed to dropping them) may disrupt Samsung Electronics’ rollout of OLED TVs. If Samsung Electronics fails to launch spring OLED TV models, its original shipment target of 1.5 million units will inevitably be affected. However, whether it launches OLED TV models in spring or summer, Samsung Electronics will take advantage of its brand and channel advantages irrespective of other considerations to take the OLED TV market by storm and aim for a market share of 15%.

Annual growth rate of Mini LED TVs doubled, shipments push towards 4.5 million units

TCL has opened up new horizons for TV products after releasing its first Mini LED TV in 2020. In 2021, Samsung Electronics launched a series of 50-85-inch mid/high-end 4K and flagship 55-85-inch 8K Mini LED models, with shipments exceeding one million units in the first year, reaching 1.5 million units, and boosting overall Mini LED TV shipments in 2021 to 2.1 million units. In addition to Samsung Electronics and TCL continuing to utilize Mini LED in 2022, more TV brands will also join the fray. Overall Mini LED TV shipments will race towards 4.5 million units. SONY showed its 8K 85-inch and 75-inch TVs for the first time at CES at the beginning of the year. Sony’s flagship 4K 85-inch, 75-inch, and 65-inch models were the most notable at CES and Sony will join Samsung and LG Electronics as another international brand marketing OLED and Mini LED TVs, intensifying competition in the high-end TV market.

Quarterly TV shipment for 3Q21 reached 52.51 million units, representing an 8.3% QoQ increase but a 14.7% YoY decrease, according to TrendForce’s latest investigations. Demand for TVs was constrained during the quarter by the increase in various country’s vaccination rates as well as the rising retail prices of TV sets, resulting in a YoY shipment decline despite the arrival of the peak season. It should be noted that prices of TV panels began to plummet in August, and this price drop enabled Chinese TV brands to both expand sales during the Singles’ Day (November 11) shopping festival and in turn make up for deficits in their yearly sales targets. Global brands, on the other hand, will be unable to capitalize on the price drop of TV panels by reflecting this cost-savings on their TV sets’ retail prices until 1Q22 due to factors such as production, transportation, and inventory adjustments. These brands are therefore having a difficult time increasing their TV shipment for 4Q21. Quarterly TV shipment for 4Q21 is expected to reach 59.13 million units, representing a 12.6% QoQ increase but an 10.3% YoY decrease. TV shipment for 2H21 will therefore likely be among the lowest compared to shipment volumes for second halves of previous years historically.

TrendForce further indicates that TV manufacturers’ shipment performances have been weakening this year as the market approaches the year’s end. Stimulus checks issued in the US resulted in persistently high TV shipment in North America in 1H21, with brands maintaining their procurement of TV panels, thereby driving up the prices of TV panels as a result. As the COVID-19 pandemic is gradually brought under control, and everyday life returns to normalcy in Europe and North America in 2H21, the pandemic-generated upswing in TV sales subsequently lost momentum. Furthermore, while prices of raw materials and transportation/logistics services remained sky-high, manufacturing costs of whole TV sets also underwent a sharp climb and were then transferred to consumers. Taken together, these factors quickly wiped out market demand for TVs. TrendForce therefore expects annual TV shipment for 2021 to reach 210 million units, a 3.2% YoY decline.

With a forecasted annual shipment of 6.8 million units for 2021, OLED TVs have become favored by various brands amidst rising manufacturing costs of TV sets

TV brands face various manufacturing-related challenges this year. Not only have panel costs, which account for the largest share of TV sets’ manufacturing costs, undergone an increase, but port congestions have also led to rising shipping costs and an extended lead time before TV sets can be delivered for retail sale. In addition to an uneven availability of various components, these aforementioned obstacles all exacerbate the risks involved with TV brands’ shipment. In a bid to maximize profits, however, brands have been making a concentrated effort to ensure that the production of OLED TVs remained free from disruptions in an effort to maximize profits.

As brands shift the focus of their sales efforts to OLED TVs, OLED TV shipment for 2021 is expected to reach 6.8 million units, a 72.8% YoY increase. This growth can primarily be attributed to an increase in OLED TV supply due to the expanded production capacity of LGD’s production line in Guangzhou, as well as the narrowing difference between LCD panel prices and OLED panel prices due to the sharp rise in the former in 1H21. In particular, LGE is set to take leadership position with an over 60% market share and a 91% YoY growth in its OLED TV shipment. Trailing behind in second place is Sony, which has been sourcing OLED panels from LGD. The Japanese company is expected to register a 53% YoY increase in shipment and possess a 20% market share. Panasonic, on the other hand, comfortably took third place with a 7% market share. Notably, Xiaomi and Sharp are the two dark horses with regards to OLED TV shipment this year with explosive YoY growths of 900% and 140%, respectively.

Major brands will concentrate on the high-end and large-sized segments, while smaller brands will continue to steadily develop mainstream products

While demand in the TV market recovers as the pandemic runs its course, TrendForce expects 45% and 55% of the total annual TV shipment for 2022 to take place in 1H22 and 2H22, respectively. TV shipment for 2022 will likely reach 217 million units, a 3.3% YoY increase, as brands are able to aggressively ramp up their TV shipments thanks to not only an undisrupted supply of panels, but also gradually stabilizing prices. For major brands, their focus will be on medium-sized and large-sized products and on products with substantial added values. Hence, the market share of large-sized TVs (including 65-inch and above models) will for the first time ever surpass 20%, with medium-sized (40-inch to 59-inch models) TVs remaining at a 55% market share. Although major brands are gradually exiting the small-sized segment, and smaller brands will have an easier time expanding their presence in emerging markets owing to gradually stabilizing prices, small-sized (39-inch and below models) TVs will see their market share drop by 1.8% next year to 25%. In any case, the primary target markets for major brands and smaller brands will not overlap next year.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com

Thanks to TV manufacturers’ aggressive procurement activities, global TV panel shipment for 1H21 reached 135.2 million pcs, a 3.5% YoY increase, according to TrendForce’s latest investigations. Notably, high-end OLED TV panels and 8K LCD TV panels showed diametrically opposed movements. The former product category reached a 2.6% market share in 1H21 (with room for further growth going forward) due to LGD’s capacity expansion as well as the narrowing gap between OLED panel prices and LCD panel prices. On the other hand, the latter’s market share fell to a mere 0.2% in 1H21 as panel suppliers were generally reluctant to manufacture 8K LCD TV panels due to these panels’ poor yield rates.

TrendForce’s findings indicate that Chinese panel suppliers were able to achieve a 58.3% share in the TV panel market, which was nearly 5 percentage points higher than their 1H20 market share, thanks to their growing number of production lines. Conversely, Taiwanese suppliers saw their market share drop by 2.2 percentage points from 1H20 levels to 21.1% in 1H21. This decline took place because of their limited production capacities and because they reallocated some of their production capacities for TV panels to IT products instead. Korean suppliers likewise experienced a decline in market share to 14.3% after SDC shuttered its Korea-based LCD fabs L7-2 and L8-1-2 and sold its Suzhou-based Gen 8.5 fab to CSOT. Finally, Japanese suppliers’ market shares increased to 6.3% as a result of SDPC’s Gen 10.5 capacity expansion.

Regarding OLED TV panels, which are relatively high-end products, it should be pointed out that LGD is the sole supplier of these panels. Not only did LGD expand the production capacity of its Guangzhou-based OLED panel fab, but LGD’s clients in the TV sector were also increasingly willing to procure OLED panels in light of the narrowing gap between OLED panel prices and LCD panel prices. Hence, the penetration rate of OLED panels in the TV panel market grew to 2.6% in 1H21, with about 3.556 million pcs shipped throughout the period. Furthermore, now that the Guangzhou fab’s OLED panel capacity reached 90k sheets/month in 2Q21, TrendForce expects annual OLED TV panel shipment for 2021 to reach 8 million pcs, with a 3% penetration rate in the overall TV panel market.

On the other hand, 8K LCD TV panels reached a mere 0.2% penetration rate in the TV panel market in 1H21 because panel suppliers’ concerns about profit and yield maximization resulted in their relatively low willingness to manufacture these products. On the demand side, clients were also unwilling to procure these panels due to persistently high quotes from suppliers. With regards to panel suppliers, CSOT in particular benefitted from the unique structure of its client base, which allowed it to dominate more than half of the 8K LCD TV panel market, with AUO taking second place. The respective market shares of CSOT and AUO currently sit at 54.4% and 22.6%. TrendForce forecasts a 0.2% penetration rate for 8K LCD TV panels for 2021 as the growth of these products is constrained by their relatively high prices and the current paucity of 8K content.

For more information on reports and market data from TrendForce’s Department of Display Research, please click here, or email Ms. Vivie Liu from the Sales Department at vivieliu@trendforce.com