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Shipments of TVs and LCD monitors will decrease due to political and economic turmoil

Shipments of TVs, LCD monitors and laptops will decrease due to political and economic turmoil
Shipments of TVs, LCD monitors and laptops will decrease due to political and economic turmoil

TrendForce analysts said that already in the first half of the year we should expect a decrease in the supply of TVs, LCD monitors and laptops. A whole range of reasons will lead to this, but first of all, a sharp drop in the commodity market due to the Ukrainian events, as well as another reduction in production in China due to a new outbreak of the pandemic.

Image source: mohamed hassan / pixabay.com

Image source: mohamed hassan / pixabay.com

Demand for televisions is declining. Even if we assume that the average consumer budget does not change, the events in Ukraine contribute to the growth of inflation, not only in the region of the conflict, but also on the scale of the global economy. The second negative factor is logistics: before the pandemic, the cost of shipping a 65-inch panel was $9, and last year it jumped to $50-100 (depending on the diagonal).

So far, TV prices are down 30-40% from last year’s high, but shipping prices are unlikely to drop this year. As a result, global brands will reduce advertising costs, and stocks of finished products will decrease by the second half of the year. All of these considerations led TrendForce analysts to revise their industry forecast for 2022: the expected shipment volume is reduced from 217 to 215 million units, and the industry growth rate is reduced to 2.4%.

Image Source: StartupStockPhotos / pixabay.com

Image Source: StartupStockPhotos / pixabay.com

In 2022, the LCD market is expected to decline in size compared to 2021. Last year’s remote-oriented economic model no longer works, and relatively stable European demand has begun to decline amid the Ukrainian events. Combined with inflation and high shipping rates, this has also forced TrendForce analysts to preliminarily adjust their display shipment forecast for this year from 144 million to 142 million units – the market decline rate increases to 2.3%.

In the laptop market, TrendForce also sees no reason for optimism yet, cutting annual shipment forecasts from 238 to 225 million units, which is due to three key factors. First, the pandemic-driven Chromebook segment, which accounted for 15% of the global laptop market last year, could shrink by 50% this year, taking 7 to 10% of the global market with it. Secondly, laptop manufacturers have announced a mass exodus from Russia, which accounts for up to 2% of the world market, which also reduces demand globally. Thirdly, due to inflation, global brands have already reduced their forecasts for deliveries this year by 10-15%.

Inventories throughout the supply chain continue to increase, and the market is forcing manufacturers of some components to cut prices. As a result, laptop manufacturers are becoming more cautious in regulating the pace of purchases, which is why the output of finished products is also not growing at all.

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