86 inch Interactive large screen panel prices from the end of June showed extreme shortage of the state, 65inch and 75 inch prices also showed a rapid upward trend, according to DISCIEN data show that from June to September 65”, 75”, 86” panel prices will rise by 15%, 12%, 22% respectively. This article will run through the four perspectives of price differentials, product, demand, and supply to identify the reasons for the rise in the price of interactive large-screen panels.
Figure 1: Price changes for key size panels
Spread factor: Bias repair after a pitched battle
There is a gap between the price of interactive large screen panel and the price of TV panel, this gap can be seen as a deviation left after the fierce battle in the interactive large screen panel market in 2019. In the first half of 2019, as new entrants in the interactive large-screen panel market, BOE and CSOT have merged with a market share of only 17%. A year later, the combined market share of BOE and CSOT has reached nearly 50% of the market, showing obvious growth, and the growth process is accompanied by fierce competition.
Figure 2：19H1/20H1 Market share of interactive large-screen subpanel manufacturers
The reason for the fierce competition is that the interactive large-screen complete machine market is actually a head-focused market. According to the distribution of manufacturers in Q2 of 2020, CVTE, Hitevision and KTC account for 62% of the total global interactive large-screen production, and the head manufacturers occupy the majority.
Figure3：2020Q2 Proportion of global major manufacturers of interactive large screens
Panel factory players increase corresponding to the head concentrated market, market competition is increasingly fierce, which led to the IFPD panel prices and TV panel prices between the existence of a Gap, but the Gap is not long exist, otherwise the TV market can be completely to the IFPD market to string goods, so the primary goal of this round of panel prices is to flatten the Gap, which is why the IFPD panel prices rose more than the TV panel reasons.
Figure 4：IFPD/TV Panel Average Price Comparison, June 2020
Product Factor.：IFPD Inner training 86”, outer training 65”, 75”
Inner training 86”：According to the previous analysis in “Seriously Out of Stock 86, Interactive large-screen Panel price is too low or Will become history”, in 2020, the shipments of smart whiteboard market in H1 education market increased by 80%, and 86 inches accounted for 90% of the shipments in smart whiteboard market.Although the shipments of education flat panel declined compared with previous years, the 86-inch shipments accounted for 38.5% of 2020H1 shipments, up 13 percentage points from the same period in 2019.The 86-inch 2020H1 conference market also accounted for 25% of shipments, up 16 percentage points from the same period last year.All of the above together led to the shipment of 86-inch IFPD in China’s overall market in the first half of 2020 reaching 165.7K, a sharp increase of 65.8% compared with the same period last year. In the third quarter, with the gradual end of the impact of the epidemic in China and the arrival of the peak education season, 86-inch in China’s market will see a greater increase.
Out training 65”、75”：In the first half of 2020, the total overseas market shipments reached 354K, with a year-on-year growth of 7%. In terms of size and structure, the overseas market 65” and 75”accounted for 37% and 30% of the total shipments in the first half of the year, respectively. The overseas market is the largest market for 65” and 75”.
Figure5：2019H1/2020H1Overseas market shipment changes and size distribution
If you want to study the overseas market, you can get a glimpse from the OECD, the Organization for Economic Cooperation and Development (OECD) currently has a total of 38 member countries, with about 310 million students, according to the World Bank data show that the total number of students in countries other than China is about 1.44 billion people, the OECD member countries have the number of students only accounted for 21.5% of the total number of overseas students, but the entire first half of the overseas market shipments The OECD countries are the focus of our overseas market research, as 80% of these educational interactive screens are exported to OECD countries.
Figure 6：2020H1OECD education shipments as a percentage of total shipments in overseas education market
Looking at the OECD education market, first of all, from the data given by the World Bank, the number of students in pre-school, primary, secondary and tertiary education in OECD countries is 37.69, 9.405, 11.426 and 64.7 million respectively, while the OECD gives the average class size for pre-school, primary, secondary and tertiary education, which is 16, 21, 23 and 35 respectively, which gives the OECD The overall school classroom count is 13.39 million, which is 1.58 times the number of OECD classrooms compared to the 8.479 million classrooms announced by China’s Ministry of Education. Looking at it from the perspective of market penetration, OECD has seen a continuous rise in education screen shipments in recent years, with a total of 2.25 million OECD education screens shipped from 2014-2019, minus about 450,000 replacements, and the overall market holdings at 1.8 million or so, comparing to the 13.39 million classrooms just mentioned, the overall market penetration rate is only 13.4%.
Figure 7：OECD Education Interactive Large Screen Shipment Change
From the perspective of product demand, the number of students in OECD classrooms is around 20, so 65” and 75” are also the main sizes in these countries’ education markets. 65” and 75” segments occupies more than 80% of the total shipments of OECD.
Figure 8：20H1OECD education market size distribution
Back to overseas shipment, although the first half of the overall shipments rose only 7% year-on-year, but if you split the quarterly view, overseas market overall growth of 23% in the first quarter, second quarter affected by the epidemic overseas markets fell 1%, the third and fourth quarter as the epidemic overseas gradually ease (or don’t care), is expected to rebound again shipments, high-speed growth, the demand for 65, 75, will be enlarged.
External factors: market recovery + large size, strong demand in TV market
After analyzing the internal factors of interactive big screen, let’s analyze the external factors again, the global market of 2 million units a year for interactive big screen is too small compared with the market of TV 260 million units a yea, so the price is largely determined by the market demand of TV. In H1 2020, global TV market shipments totaled 103 million units, down 10% year-over-year, while 65”, 75”, 80+” (82”, 85”, 86”) shipments grew by 15%, 37%, and 48%, respectively.
Figure 9：2019H1/2020H1 65/75/86 inch TV shipment changes
In the second half of the year, the overall market will gradually recover, with TV shipments expected to rise by 5.9% in the third quarter, and demand for 65, 75, 80+ sizes expected to further amplify.
Figure10：Global quarterly TV set shipment forecast
Supply factors: one up, one down 80+, long way to go 10.5
The above demand for TV market is based on the size of 80+ segment. The reason for this is that the capacity of 86 inches is too large, and the capacity is limited in the panel factory, which shares the capacity with the size of 80+. Therefore, the characteristics of 86 inches need to be viewed from the capacity of 80+ segment.First of all, from the 80 + panel factory distribution, indicate, CSOT are plans to increase production capacity, AUO also began in September to deliver, bulk supply is expected to begin in October, but it is worth noting that the SDC, due to the closure of SDC by the end of the year, its 7 generation line production capacity of 82 inch will also disappear, part of the demand will be transferred to CSOT and AUO, so although there are three panel factory increased 80 + size section of the production capacity, but after a merger with SDC a increase a decreases calculation, 80 + size section of the production capacity only a slight increase of 9%, the overall increase in supply range is not large.
Figure11：80+ size segment panel factory production line distribution
Then look at 65, 75 market has to focus on 10.5, due to the Korean panel factory 65, 75 production is mainly concentrated in the 7 generation line and 8 generation line, with the strategic exit of the Korean plant, the sharp decline in shipments, will pose a greater impact on 65, 75 capacity, while 65, 75 production of large 10.5 generation line capacity is gradually increasing, which led to the formation of a vacuum layer of capacity in the market. The timing of the vacuum layer out of line is particularly important, and this vacuum layer is currently out of line in and around August, both for IFPD and TV are stocking season, which is one of the reasons why the price of 65 and 75 panels has risen sharply.
Figure12：Capacity change Overall line capacity change (G8.5 basis)
Data source: DISCIEN Unit: $
Note: Line statistics with capacity change, G10.5/G7 has been converted to G8.5 capacity.
Internally, IFPD substantially increases the demand for 86-inch panels in China, while overseas demand for 65 and 75 panels. Externally, the demand for panels in 65, 75 and 80+ segments of TV increases significantly, and the demand side generally presents a trend of significant increase.From the perspective of supply, the increase of 80+ production capacity is limited. The strategic withdrawal of Korean panel factories leads to the vacuum period of production capacity coincides with the peak season of panel demand, which exacerbates the supply tension of 65 and 75 in the market.From the perspective of price, the fierce competition in the IFPD panel market before has led to a certain Gap between the panel price and TV. From the perspective of market, the Gap cannot exist for a long time, that is to say, the Gap needs to be made up, which is also the reason why the PRICE of IFPD panel rises sharply.
Looking forward to the follow-up, IFPD domestic season are mainly concentrated in the third quarter, especially for 86 inch demand mainly concentrated in the education market, each big installation deadline can only in the school of the national vacation time, so the demand of the screen before the mid to late September at the latest, in the future demand will be reduced, the overseas market after second season in the third quarter, in the fourth quarter demand also eased;And TV market in the third quarter after the domestic stock 11, 11, overseas stock Black 5 and a series of actions, the fourth quarter demand has also slowed down;In addition, the supply side will also recover from the vacuum layer in the fourth quarter, so the IFPD panel price will maintain a relatively high growth in September, the price rise will moderate from October, and the price is expected to be flat in November and December.
Data source: DISCIEN Unit: $