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Samsung stops purchasing LCD panels amid falling demand for TVs

Samsung stops purchasing LCD panels amid falling demand for TVs
Samsung stops purchasing LCD panels amid falling demand for TVs

Samsung has suspended purchases of LCD panels due to relatively low demand for TVs. According to the South Korean edition of The Elec, the company sent a warning back in June to participants in its supply chain, including display manufacturers: BOE, CSOT, HKC, AUO and Innolux.

It is expected that the measures taken will be valid until the end of July, but it is possible that purchases will not be carried out even longer. Samsung is known to have lowered its target for TV shipments this year from 45 million units to 40 million. Analysts from companies like Omdia and Display Supply Chain Consultants have also changed forecasts for Samsung LCD TV shipments this year. If earlier it was expected that they would amount to 53-54 million units, now experts agree that their number will reach only 44 million units.

Samsungs flagship 4K LCD TV (QN95B)

Samsungs flagship 4K LCD TV (QN95B)

Samsung shipped 50 million TVs last year, up 10% from 2020. The tech giant ramped up shipments aggressively after 2020 logistics problems amid the pandemic. However, in the first half of 2022, the demand and sales of TVs in North America and Europe fell significantly and Samsung’s current inventory lasts for 16 weeks, compared to 7-9 weeks before the pandemic. Other TV makers like LG Electronics, TCL and Sony are also lowering their full-year sales forecasts and cutting back on LCD panel purchases.

According to Omdia experts, in early June, the level of capacity utilization at the enterprises for the production of TV panels was 77%, 4.5% less than a month ago and the lowest in the last 5 years. According to some reports, an acceptable level of loading is 85-100%. Panel makers are reportedly anticipating a drop in profits due to declining display prices. According to some reports, LG Display is expecting losses in the second quarter. Recently, there was information that experts predict Samsung and LG to fall in demand for household appliances and electronics.

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