st5461d07-1-xr-2 lcd panel supplier

A T-con board — short for “timing control board” or “timing controller” — is found in LED and LCD TVs. This board converts the video signal from the main board and sends it directly to the screen to display the signal in the correct order and at the correct spot on the screen.

Global TV market share leader Samsung is reportedly calling upon an old resource for LCD panels as it shuts down internal panel production through it Samsung Display manufacturing unit that is shifting focus to hybrid quantum dot OLED (QD-OLED), MicroLED panels and other technologies for television sets.

We previously relayed reports out of South Korea that Samsung Display was moving to end production of LCD flat-panels in its domestic market by the end of the year. More recently the company has indicated it is now ending LCD panel production in other countries as well. This doesn’t mean the end of QLED or other LCD TVs coming from the Samsung Electronics TV manufacturing and marketing company in 2021 and beyond, however.

As Samsung Display shifts to next-generation display panel technologies, Samsung Electronics will source LCD panels for its quantum dot LED and LED-LCD televisions from LCD dipslay resource Sharp Corp., the Japanese electronics manufacturer now majority controlled by Taiwan’s Foxconn. Samsung will get LCD panels for other displays and devices it makes from additional Asian-based manufacturers.

According to a report by trade resource Digitimes Wednesday, Samsung is shifting large format LCD panel suppliers to Sharp as its primary panel source for TV-sized panels after Samsung Display ends LCD production at the end of 2020 due to decline profitability. Samsung Electronics had previously used the Japanese-based LCD panel maker as an LCD panel resource several years ago when supplies were tight or unavailable internally for certain screen sizes.

That relationship, which toward the end had been somewhat contentious as Foxconn chairman Terry Gao sought to leverage higher prices for certain screens in short supply, is now back on, apparently in a bigger way than ever. According to reports, Samsung apparently will rely heavily on Sharp for most of its TV panel needs. The report did not indicate where Samsung plans to acquire smaller LCD display panels for other devices it produces.

In the meantime, Samsung Display is advancing its production of its hybrid quantum dot OLED display panels and microLED panels for next-generation television technologies that will afford greater profitability at a time when new large 10.5-gen. LCD panel plants in China and elsewhere are churning out greater volumes of LCD panels.

We downgrade to HOLD for LGD and cut our 12m TP from KRW22,000 to KRW17,000 (12m fwd BVPS x 0.5x target P/B). We revise down 2022-23 earnings estimates on anticipated losses in 2Q-3Q22 amid (1) contracting TV/PC demand and (2) plunging LCD panel prices. We see panel prices falling as Chinese panel makers (e.g., BOE, CSOT) continue to lower prices in their attempt to capture market share despite LCD prices dipping below cash cost.

Given slumping LCD/OLED panel demand and a growing fixed cost burden due to declining utilization rates, we forecast 2Q22 revenue at KRW5.9tn (-10% QoQ, -16% YoY) and operating loss at KRW270.6bn, which is higher than the operating loss consensus of KRW59.0bn. For 3Q22, we expect LGD to remain in red with operating loss of KRW51.9bn. TV/PC demand should continue to slow in 2H22 given increasing TV inventories at the world’s top five TV makers and shipment cutbacks by PC makers (e.g., Dell, HP, Lenovo).

In 2Q22, the global LCD panel market faced (1) aggressive price cuts by Chinese panel makers looking to gain market share and (2) a decline in TV/PC demand due to rising inflation. As such, we failed to see any momentum that would improve panel supply-demand dynamics or curb price declines. The cost burden for panel manufacturers grew, as slowing IT panel demand pushed LCD panel prices down, with the cost of core parts (supply shortage in 2021) and foundry/logistics costs either significantly increasing or sustaining high levels.