LGD production line accident may cause loss of 60,000 glass substrates, large-screen plan is hindered

Recently, a personal safety accident occurred on LG Display's 8.5th generation P8-1 production line in Paju, South Korea. The production line was immediately shut down for maintenance, waiting for the local government to intervene in the investigation.

It is reported that the production line will be shut down for maintenance, the longest shutdown time will be one month, and the shortest will be about two weeks. Work can only resume after the inspection is completed.

Panel prices may rise again, and the color TV industry will not escape the predicament

At present, the 8.5-generation line in Paju, South Korea accounts for about 5.8% of the global production volume, and the capacity loss during this period will cause the prices of 49-inch and 55-inch products, which are one of the main cutting types of the 8.5-generation line, to continue to rise.

On the other hand, at this stage, the panel industry is about to prepare for the third quarter, and major panel manufacturers are basically in full production. A two-week production stoppage will have a serious impact on LG. According to data, this incident may reduce the input of about 50,000 to 60,000 mother glass substrates, which will have a certain impact on the third quarter panel supply.

For the entire color TV industry, LGD's production line safety accident is undoubtedly "adding insult to injury."

Since the third quarter of last year, the panel market has ushered in a new round of price increases. Both small-screen and large-screen TV panels have seen varying degrees of price increases, covering all sizes.

In fact, after the price increase of 720P and 1080P panels, 4K UHD TV panels also failed to escape the trend of price increase. Among them, the highest increase of 49-inch 4K UHD panels was US$13, and the highest bid was US$163. The highest increase of 55-inch 4K UHD TV panels was US$8, and the highest bid was US$205.

As the most expensive component in a TV, the increase in panel prices will inevitably lead to a significant increase in TV costs. Since last year, due to the impact of panel price increases, TV manufacturers have become very passive and can only eliminate this pressure through internal cost optimization and profit reduction.

Now, with LGD's panel accident and the loss of two weeks of production capacity, the industry's oversupply ratio in the third quarter will drop from the original 4.0% to 3.4% due to the loss of two weeks. The overall panel supply will become tighter, which means that the color TV industry's difficulties will continue.

The big screen plan went against expectations, and the dominance of Korean manufacturers may be shaken

However, it is not just the panel prices that are affected by this accident; the dominant position of South Korean panel manufacturers may also be shaken.

First of all, due to the impact of this incident, LG’s plan to increase profits by developing large-size products may be hindered.

In March of this year, LG launched 86-inch and 75-inch ultra-high-definition TVs ahead of Samsung. In April, LG launched the 77-inch LG SIGNATURE OLED TV W series in South Korea, priced at 33 million won. This is the largest and most expensive OLED TV on the market.

At the same time, according to statistics, in the first quarter of this year, Samsung and LG's combined share of the global high-end TV market priced over $1,500 was about 50%, with LG's share being 35.8% and Samsung's 13.7%.

It can be seen that the market share of high-end TVs is particularly important to manufacturers as it determines their profitability.

Perhaps, as the research agency has analyzed, Samsung and LG will increase the demand for large-size TV panels in the third quarter, as they will both launch ultra-large-size TV models. However, the production line accident has brought obstacles to LG's large-screen plan.

Not only that, in this incident, BOE, which currently owns the most 8.5-generation lines in China, is expected to benefit, and it is even more likely to change the industry situation of the large-screen supply chain.

Currently, BOE has a total of four 8.5-generation lines including Beijing, Hefei, Chongqing and Fuzhou, with flexible production capacity configuration. The total annual production capacity of the three production lines is about 3.48 million pieces, and the Fuzhou production line is expected to reach a monthly output of 8k/M by the end of the year. By then, it will not only further increase BOE's production capacity advantage in large-size panels, but may even shake the dominant position of Korean panel manufacturers.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.