With negotiations on the supply of large-size OLED panels from Samsung Electronics and LG Display delayed, LOTTO lowered its global OLED TV shipment forecast for this year. In addition, the shrinking consumer psychology caused by macroeconomic uncertainty has also had a negative impact on the growth rate of OLED TV shipments.
LOTTO technology (RUNTO) once held in Busan, South Korea, "The universality of OLED determines that it is the next generation of mainstream technology" believes that considering Samsung Electronics' market-leading effect on the market through the launch of QD-OLED TVs, procurement plans based on WOLED TV panels, and the development of the global OLED TV category, it is optimistic that the shipment of global pan-OLED TVs in 2022 is likely to reach tens of millions of units for the first time.
Entering May, the market has undergone some changes, which exist in the negotiation progress of Samsung LG, the continued turmoil in the international situation caused by the Russian-Ukrainian war, the scattering of COVID-19 in China's major cities, and the continued low operation of LCD TV panel prices.
There should be a long-term supply agreement between Samsung Electronics and LGD
Negotiations between Samsung Electronics and LGD were unexpectedly delayed. In fact, RUNTO believes that this is not a simple purchase order negotiation, but a long-term, strategic cooperation agreement.
Samsung Electronics' Television Business (VD) As a global TV leader, the global BP was 44.6 million units at the beginning of 2022, and according to LOTU Technology (RUNTO) data, VD shipments reached 11.2 million units in the first quarter of this year. OLED technology, as a stable development of VD's next subdivision technology model, requires at least more than 10% of the internal proportion. As a result, VD as a whole needs to purchase at least 4.5 million OLED panels from Samsung Display (SDC) and LGD.
According to the upstream and downstream industry chain information, SDC's current QD-OLED yield rate is less than 70%, and the first half of the year target is 80%. Based on the G8.5 panel production line, which has a monthly production capacity of 30,000 substrates, its annual shipments range from 750,000 to 1.4 million units, mainly for Samsung and Sony, which have released QD-OLED TVs in the first quarter.
According to RUNTO, LGD shipped 7.97 million WOLED panels in 2021. In 2022, according to the 88K per month substrate of the Paju plant in South Korea and 90K per month at the Guangzhou plant in China, the annual shipment volume is expected to reach 11 million pieces. By customer segmentation, LGE accounted for 63%, Sony accounted for 15%, other customers accounted for 9%, and Samsung Electronics originally planned to account for 13%, that is, 1.5 million pieces.
From this point of view, the amount of SDC and LGD that can supply VD in 2022 is about 2 million pieces. Such a supply is not enough to meet the Samsung brand to launch a main technology model. Therefore, on the one hand, Samsung TV needs SDC expansion and yield improvement support; on the other hand, it needs to reach a long-term agreement with LGD for many years, so that LGD can make additional investments or customer reallocations that are conducive to Samsung TV's production capacity.
Is May a watershed in negotiations between Samsung Electronics and LGD?
The industry believes that May is a watershed in the negotiations for the supply of large-size WOLED from Samsung Electronics and LGD. It was mainly based on card points to present a new government to South Korea's Yoon Seok Yuet and sports marketing expectations for the World Cup in Qatar, which opens in November.
Conversely, apart from the above, Samsung Electronics and LGD have no other negotiating momentum. Last year, when Samsung Electronics tried to purchase WOLED from LGD, it was at a time when the price of LCD panels rose sharply, and it was difficult for LCD TVs to ensure profitability. Today, the price of LCD panels has been at a very low water level, and LGD's operating profit has plummeted. "May LCD TV panel price forecast and fluctuation tracking" article mentioned that if China's large manufacturers do not have a major production cut, and China's 618 promotion period of unexpected depression, the LCD panel market is difficult to meet the inflection point. Samsung Group has abandoned the LCD business, which remains LGD's main business. Therefore, the initiative of the negotiations has shifted from LGD to Samsung Electronics. From Samsung's standpoint, the chances of catching up on the World Cup and North American Black Friday are already slim to none, so negotiations have become less urgent.
Of course, this does not mean that if there is no agreement in May, the negotiations at WOLED will be completely terminated. LOTTO believes that QD-OLED is first of all the strategic technology of Samsung Group, and it and WOLED are important components of pan-OLED, which need to echo the two; secondly, before the quantum dot electroluminescent products are truly mature, Samsung TV needs a technical separation from other LCD-based TV brands, and the current Micro LED obviously cannot take on such a mission in the consumer market.
Four changes led to a downward revision of global OLED TV shipment forecasts
In fact, according to the upstream and downstream information of LOTU Technology (RUNTO), VD has not officially opened the product preparation of WOLED as of now. In general, finished product production, logistics, laying, promotion, etc. take at least half a year, so in 2022, Samsung has almost no possibility of achieving stable shipment of WOLED TVs. According to the article "Samsung Electronics' 2022 High-end TV Lineup", in 2022, Samsung VD originally planned to sell 500,000 QD-OLED TVs and 1.5 million 4K WOLED TVs.
The second change is that the durability of the Russo-Ukrainian war has greatly exceeded global expectations. At present, from the perspective of Russia's combat effectiveness and The military support of Europe and the United States for Ukraine, the war will still be long-term. In addition, inflationary pressures from major governments to support their economies through quantitative easing in the wake of the COVID-19 pandemic are constraining global consumer psychology. Therefore, the international situation is unstable and inflationary pressures are stumbling blocks to the development of the tv consumer goods market.
Third, the world's most important and typical TV market, China is facing a complex and severe situation of multiple outbreaks of epidemics. In order to avoid the risk of rebound, major cities such as Shanghai, Beijing, And Guangzhou-Shenzhen are committed to zeroing out social coverage. The offline consumer market will inevitably be hit hard, and it is difficult for the retail of high-end TV products to meet the expectations at the beginning of the year.
In addition, even if the price of LCD panels rises in the second half of the year, it will still run at a low level, resulting in the improvement of the profitability of LCD TVs, and the willingness of manufacturers to promote OLED will naturally decline.
Based on the above changes, RUNTO lowered its global OLED TV shipments in 2022 to 7.9-8.1 million units, compared with 6.5 million units in 2021, the growth rate fell from 53.8% to about 23%, down about half. Correspondingly, the overall global TV market size will also be revised down to less than 210 million units in 2022, and OLED accounts for about 4%.
Past reading
