TV Panel Market May Take Hit Due to Coronavirus

(Image credit: LG)

LONDON—The outlook for TV manufacturers does not look as rosy as it once did, as new display panel purchases could see a slump related to a potential coronavirus-related recession. This is according to a new study from Omdia.

There was the expectation that major upcoming sporting events, led by the 2020 Summer Olympics in Tokyo, would help lead to a boost in display panel sales, particularly among South Korean and Chinese TV manufacturers. China was anticipating a 5% increase in unit purchases in the second quarter of 2020 after they experience a 6% decrease in the first quarter of the year.

“Now these companies are growing increasingly apprehensive that the coronavirus pandemic will spur a global recession—an event that would impact television demand,” said Deborah Yang, director of display supply chain at Omdia. “As a result, TV makers need to revise their purchasing plans to accommodate potentially drastic changes in the level of demand.”

Such changes will first include supply chain disruptions that occurred as a result of coronavirus, like labor and component shortages, logistical problems and rising costs. Then, starting in April, per Omdia, they will have to take action to try mitigate the impact of the demand downturn.

Chinese TV makers were beginning to ramp up production of TV panels again, with most TV production expected to be completely resumed in the second quarter. 

Korean TV companies, meanwhile, were looking to push aggressive shipment plans in 2020, hoping to gain market share from industry rivals more impacted by the pandemic, Omdia says. But the spread of coronavirus in Europe could lead to Korean companies having to cut panel demand in the second quarter to reduce the risk of rising inventory.

“The question for TV makers is whether the market will recover quickly, or if it will face a persistent downturn,” said Yang. “TV display supply chain participants will need to prepare countermeasures for potential worse case scenarios now. Coronavirus has now become the most important swing factor influencing everything from demand, to supply, to the evolving TV competitive landscape.”

More information is available at Omdia’s website