South Korean and Chinese display manufacturers are adjusting their large LCD panel production volumes with an oversupply caused by a massive investment by Chinese companies leading to a rapid decline in price and profitability.
Sakai Display Products Corporation recently postponed mass production at its 10.5th-generation LCD panel manufacturing plant in Guangzhou, China to April 2020. Previously, Sakai Display planned to initiate the first stage of the production last month for a monthly production volume of at least 60,000 panels.
Hon Hai Group, the owner of Sakai Display, started the construction of the plant in 2017 and recently completed the construction to produce 65-inch and 75-inch LCD TV panels. The group invested a total of 61 billion yuan in the plant.
The postponement is because the mass production is unlikely to be profitable. At present, the average selling prices of large LCD panels are falling short of production costs, meaning more production leads to more losses.
According to industry sources, Samsung Display significantly reduced its 7th- and 8.5th-generation LCD panel production volumes last month and LG Display stopped some of its 7.5th- and 8.5th-generation LCD panel production lines as of late.