PR96890

LONDON, July 12, 2022 /PRNewswire=KYODO JBN/ --

Global display makers' capacity utilization is expected to drop to 73% in 3Q22;

a record low for the sector since 2012 according to the latest forecast from

Omdia's 'Display Production & Inventory Tracker - June 2022 (

https://omdia.tech.informa.com/products/display-production-inventory-tracker?utm_source=pr&utm_medium=pressrelease&utm_campaign=displayprodtracker

).

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Photo -

https://mma.prnewswire.com/media/1854325/quarterly_fab_utlization_rate.jpg

LCD TV panel prices have plunged to new lows in June, as TV makers feel the

pressure to continue slashing their panel demand for 2Q22 and further

downsizing panel purchasing plans for 3Q22. Samsung has just made the decision

to halt procurements from mid-June and avoid a high inventory in the pipeline.

This decision will likely ripple across the display industry.      

In response to Samsung's strong change in the displays and components sourcing

strategy and amid growing financial losses in the TV panel business, panel

makers have no better choice than to cut their fab utilization rates

significantly from June.

According to Omdia's Tracker (

https://omdia.tech.informa.com/products/display-production-inventory-tracker?utm_source=pr&utm_medium=pressrelease&utm_campaign=displayprodtracker

),  the monthly average utilization of panel makers in June and July 2022 is

expected to drop to 70% and 69% versus the total designed capacity

respectively, which is the lowest level in 10 years. The previous historical

low was 77% in February 2020, when oversupply issues dampened the market and

just before the pandemic buoyed sales.

Quarterly average utilization in 2Q22 is expected to be record low as well, at

77%, and is projected to fall even further in 3Q22, to 73%.

Alex Kang, Principal Analyst, Omdia (

https://omdia.tech.informa.com/authors/alex-kang?utm_source=pr&utm_medium=pressrelease&utm_campaign=displayprodtracker

) said: "The drop in utilization directly leads to higher fixed costs and

ultimately results in elevated production costs and profit deterioration, which

is why manufacturers try to avoid it at all costs. The fact that panel makers

have chosen to reduce utilization despite a drop in production and

profitability implies that the current price plunge is excessively steep and

that panel makers are attempting to stop profitability from further

deteriorating."

About Omdia

Omdia is a leading research and advisory group focused on the technology

industry. With clients operating in over 120 countries, Omdia provides

market-critical data, analysis, advice, and custom consulting.

Contact:

Fasiha Khan / T: +44 7503 666806 / E: fasiha.khan@omdia.com

Visit Omdia (

https://omdia.tech.informa.com/?utm_source=media&utm_medium=pressrelease&utm_campaign=AImarketmaturity

)

SOURCE  Omdia