Corning announces further increase in the price of glass substrates for display panels in the third quarter

Corning announced the price increase again on its official website on June 22, Eastern Time. This is the first time in the history of the panel that the price of glass substrates has increased for two consecutive quarters.

Prior to this, Corning announced for the first time at the end of March this year to increase the price of glass substrates in the second quarter. In this announcement, Corning pointed out that due to the increase in transportation costs, energy, raw materials, and many other operating costs, and inflationary pressures, it will moderately increase the price of glass substrates for displays in the third quarter.

Corning predicts that in the next few quarters, the supply of glass substrates will remain in short supply, but Corning will continue to cooperate with customers to maximize the production capacity of glass substrates.

An analyst from Great Wall Securities previously released a research report saying that glass substrates are one of the highest parts of LCD panels. With the gradual release of domestic high-generation LCD panel production lines, the domestic market will account for the global LCD glass substrate market. Further increase is expected to increase from 58% in 2020 to 73% in 2025.

From the perspective of the supply side, glass substrates are a technology-intensive industry with extremely high barriers to entry. Production equipment requires independent research and development by glass substrate manufacturers. At present, most LCD glass substrates are monopolized by overseas giants such as Corning, NEG, and Asahi Glass, while domestic manufacturers occupy The ratio is very low, and most of them are concentrated in products below the 8.5 generation.

Rainbow shares in the domestic leading position in the field of glass substrates, the self-developed overflow method G8.5+ glass substrate products are progressing smoothly, and it is the only domestic manufacturer that can supply 8.5-generation glass substrates in batches.

The price increase of panel raw materials is expected to continue to Q3. High-end display helps the leader to get out of cyclicality

The panel industry is now showing a situation where the upstream, midstream and downstream are rising. The market has been bearish on panel prices in the third quarter before, but at present, the quotations are still fairly stable and there is room for a slight increase. According to the latest report released by WitsView, a research organization in the panel industry, on June 22, the prices of the three major application panels for TVs, laptops and monitors continued to rise in late June, except for 55-inch TV panels and 27-inch display panels. The gains were all over the first ten days.

In addition to supply and demand factors, the reason why panel prices have risen sharply also reflects the sharp rise in raw material prices.

Omdia Display Research Director Xie Qinyi said that since the beginning of this year, the increase in raw materials has been considerable, and the price increase of panel materials is expected to continue into the third quarter. The average price increase of glass substrates in the second quarter is about 5-10%, and the third quarter is expected to increase by 5-10%. Level. From the perspective of the supply and demand of glass substrates, although NEG and Asahi Glass (AGC) have recovered their production capacity, they are still unable to supply full production. The supply gap for glass substrates is still in place. On the other hand, the production capacity of mainland panel factories has increased. The demand for glass substrates has risen, resulting in a shortage of glass substrates in the third quarter.

However, analysts are generally not optimistic about the continuity of panel price increases, and believe that the current round of panel price increases starting in Q3 2020 will gradually differentiate and enter the end stage.

Huang Leping said that in the medium and long term, the price of large-size TV panels will remain relatively firm. Citic Securities analyst Xu Tao and others released a research report on June 17 and pointed out that in the future, the epidemic will not change the long-term trend of economic recovery and capacity withdrawal, superimposed on the improvement of overseas terminal demand, brand replenishment drives demand, and upstream IC and The gap in glass substrates and other materials is difficult to make up for the price increase. The overall price boom of large-size LCDs is expected to continue until Q3 of 2021, but the follow-up will show a trend of divergence in which the prices of smaller sizes will stabilize and the larger sizes will increase.

Chen Yanshun, chairman of BOE, said in a previous survey that the background and process characteristics of this round of panel prices are different from the previous cyclical rises. The semiconductor display industry will go out of cyclical characteristics in the future and become a certain growth factor. industry. After the characteristics of industry development are transformed into growth characteristics, price fluctuations will still exist, but the amplitude of fluctuations will be narrowed, the time period of fluctuations will be lengthened, and the elasticity of the recovery of leading companies will be significantly enhanced.

In this context, in addition to short-term price increases, the mid- and long-term logic of the panel industry may be more valued. Mid-to-high-end display technology and in-vehicle display have become the key to opening the door to the future, pointing out the technological path for future TV panel value enhancement.