However, after strategically over-building some inventories, these Chinese brands are in no rush to refill their panel stockpiles in the second quarter. Their purchasing plans for the second quarter have become more conservative, anticipating a decline of 17 percent quarter-on-quarter and 8 percent year-on-year. This compares to the previous forecast of a decline of 11 percent quarter-on-quarter and 2 percent year-on-year.
“The fast-changing dynamics of the TV panel supply base will have an impact on TV makers’ buying plans during the next couple of months,” Yang said. “These changes include the panel makers’ moves to manage their fab utilization in order to maintain their supply-chain agreements and their financial performance. Another major development is the ramp up of the world’s second Gen 10.5 fab, which is operated by a Chinese panel maker. Furthermore, there’s the scheduled restructuring of fabs by Korean panel makers.”
In addition, the deals for upcoming promotional activities in the North American, Chinese and European markets in the second half of the year will represent an important factor influencing TV makers’ purchasing and pricing negotiations.
TV makers will start to refill their panel inventories starting in the latter part of June or early July. These companies are taking all possible measures to enhance their competitiveness and win more business.
Looking ahead to the third quarter, TV makers are very anxious about the demand outlook. As a result, they are unable to give a clear picture of their panel purchasing plans. This is because the TV display supply chain will be facing the new risk of tariffs on the TVs exported from China into the United States. TV makers have factored in the risk of a correction in panel demand.
“The competitive landscape of the TV display market will be significantly changed this year, forcing supply-chain players to reset their business strategies,” Yang said. “Eventually, the supply-chain industry participants will need wiser strategies to find solutions that can minimize the impacts of potential tariff increases.”
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