The fundamental factor affecting the panel cycle is also the fluctuations in the downstream markets such as LCD TVs and smartphones. Although many upstream panel companies have been working hard to find ways to resist cycles in the past five years, they are still on the way.
Huaxin||Written by
The periodic turning point of LCD panels, which has risen for 13 consecutive months, has arrived early again. Since June 2020, due to the rise in raw materials such as chips and glass, the influence of supply and demand relationships, and the adjustment of production capacity of some enterprises, LCD panels have started a long-lost period of growth, but they came to an abrupt end in mid-2021.
As of April 2022, LCD panels have once again fallen downward. Although, the head of an upstream panel company recently publicly encouraged the industry, saying that the panel cycle has reached the bottom. However, industry insiders familiar with the color TV and smartphone markets generally believe that the downward trend of panels will continue, and this downward cycle has just begun, and it will be some time before it ends.
Therefore, for many upstream panel companies such as BOE, TCL Huaxing, and Samsung Display and LG Display, although it is "usual" to face this cycle, it is also facing "hard choices". On the one hand, operating profits will definitely decline before revenue scale, and in order to grab market orders, the price war between panel companies will quietly start; on the other hand, it is "imminent" to get rid of excessive dependence on LCD panel display technology and industrial applications such as TVs and mobile phones.
Facing the situation of "coming fast and going slowly" in the panel cycle, although many people have already seen the company's hearts, there are not many ways to deal with it in the face of the arrival of a downward cycle. After sorting out the home appliance circle, it was found that the main application industries of display panels are currently concentrated in the two industries of TV and mobile phones, and the response methods are also relatively concentrated in these two areas.
First, technological innovation, in addition to LCD panels, it actively develops TV OLED panels, as well as mobile phone flexible screens, etc.; second, structural adjustment, actively stop production and reduce production of some low-profit, low-value-added panels, and turn to high-profit, new technology panel production, and balance market supply and demand through production reduction; third, market adjustments, reduce dependence on TV and mobile phone supply and increase market expansion in IT, automotive, commercial display and other industries; fourth, business expansion, break out of the panel industry, develop the chip industry upward, and expand smart medical, smart retail, industrial Internet and other businesses.
However, for many practitioners in the display industry, everyone knows in their hearts: first, LCD panels are still the absolute mainstream of display technology, and the market application of other new display technologies has been launched, but the journey of scale is still long and far away; second, the market application of TVs and mobile phones is still the absolute mainstream of the display industry, because of the large scale and high unit price, it is incomparable to IT, in-vehicle and commercial displays, so it will take time to build multi-business fulcrum points for many display panel companies. From the perspective of revenue, it is also difficult to find near fire. Furthermore, judging from the current supply and demand relationship of the first-tier market, it is almost impossible for smartphones or LCD TVs to rebound in the market to see a market consumption rebound. From the perspective of industrial chain, the panel and the whole machine are a relationship of "one prosper and one prosper and one loss".
Therefore, the rapid switching of panel cycles has not yet reached the bottom from a 13-month rise to a decline for nearly a year. Good days are short but hard days are long. For many home appliance companies, how can they understand the cycle and how to face the challenges of the market and consumption cycle that may come at any time? As the saying goes, strengthening strength in the upward cycle to seek development and adjusting structure in the downward cycle to establish new impetus is the new topic that many power manufacturers should consider next.
On the one hand, everyone must see that any cycle cannot be avoided or escaped. Home appliance manufacturers can only adapt to the development and regulation of the cycle, learn to adjust the structure and plan new situations at the trough of the cycle, and make it bigger at the climax of the cycle. Of course, it takes time to grasp the nodes of this cycle, and it also requires ability to judge.For the panel industry, the cycle has been reincarnated many times, so in the face of the downward cycle that began last year, local panel display companies are obviously more relaxed: first there is a new business fulcrum, then there is a new project fulcrum, and in addition there is a fulcrum for rhythm regulation.
On the other hand, don’t panic when facing cycles. Home appliance manufacturers must have the business qualities of “not being discouraged when the troughs and not being impetuous when the climaxes”. They must truly learn to use periodic node shifts and speed adjustments to promote the implementation of a series of transformation and transformation actions of the enterprise. In particular, we must use the power of the industrial chain to build cyclical business and strength. At present, many home appliance companies are either doing a long industrial chain, covering comprehensively from upstream to downstream; or creating new businesses and tracks outside home appliances to seek new revenue scale and profits.
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