US Tariffs and Panel Demand: Anticipating Short-Term Production Shifts
24 March 2025 · Uncategorized ·
The ongoing issue of the United States imposing additional tariffs continues to impact the display panel market. According to TrendForce Deputy General Manager Fan Bor-yu, TV brands have accelerated inventory buildup in anticipation of tariff implementation this year, boosting panel demand during the first half but likely leading to a gradual decrease in the second half. Panel manufacturers may adjust production capacity between April and May as a result.
At today’s seminar hosted by TrendForce, Fan noted that US tariffs affecting the industry's "heavy front end light back end" situation for 2023, combined with China’s “old-for-new” policy, significantly increased panel shipments in the first half of this year. However, demand is expected to weaken later unless new positive factors emerge.
Chinese subsidies for home appliances spurred TV demand from last quarter through early this year; however, as these effects diminish and brands reduce inventory buildup, price increases for TV panels will likely slow down between April and May due to the US tariff issue. Panel manufacturers may face pressure in adjusting production capacity accordingly.
Fan described a "cat-and-mouse game" dynamic between panel makers and brand companies: suppliers tend to cut back supply as soon as demand slows. While rumors suggest major maintenance might occur during Q2 for capacity adjustments, no official plans have been announced yet; April’s production adjustment is likely to be minor with May being more critical.
Fan emphasized that effective capacity adjustments by manufacturers in Q2 would benefit industry stability and allow peak season demand to materialize later this year. Otherwise, uncertainties remain high, potentially leading to further capacity adjustments during the second half of 2023.
Regarding information electronics panels, Fan noted that US tariffs will heavily influence LCD monitor panel demands in Q1; brands have been stocking up on inventory while prices offer little profit margin due to competition with TV panels. Consequently, manufacturers hope for price increases across both categories but if pricing weakens for the latter, monitors may not see significant hikes either.
Fan analyzed that American notebook brand layouts are accelerating in Southeast Asia and thus less affected by tariffs compared to brands like Lenovo; first-quarter inventory buildup hasn't increased much due to tariff concerns, suggesting a stable situation through Q2.
Panel manufacturers’ capacity adjustments will become more evident from May onwards as China’s 618 shopping festival approaches, requiring stockpiling completion between April and May. Observing whether the US imposes a 25% tariff on Mexico in April or further increases tariffs against China could provide insights into potential impacts.
According to TrendForce data, panel shipments typically see approximately 48% during H1 and around 52% for H2 annually; however, this year's distribution might be closer to 51-49%.
Fan believes the industry is entering a relatively stable phase with concentrated Chinese capacity but Taiwanese firms still face pressure. Beyond traditional display businesses, they must venture into semiconductor or Micro LED products among others. Therefore, these adjustments over recent years are crucial for company survival as manufacturers respond proactively to declines in existing sectors.
He pointed out that AU Optronics’ acquisition of German automotive parts supplier BHTC aims at achieving a 30% mobile business and 20% system integration revenue; this would help surpass traditional display businesses, with effectiveness expected around the years 2026-2027.
Regarding new panel technologies, Senior Deputy General Manager Qiu Yu-bin expects Micro LED to ride on demand from China's burgeoning electric vehicle market next year but notes that other markets are cooling down which affects this segment too; manufacturers need foundational products like transparent or hidden display tech.
Qiu believes the turning point for significant growth in the Micro LED panel industry will be within two years, with TVs not being a primary driver due to high costs and insufficient profitability—demand is therefore expected from niche automotive applications.
(Writer: Pan Zhiyi; Image source: Shutterstock)
At today’s seminar hosted by TrendForce, Fan noted that US tariffs affecting the industry's "heavy front end light back end" situation for 2023, combined with China’s “old-for-new” policy, significantly increased panel shipments in the first half of this year. However, demand is expected to weaken later unless new positive factors emerge.
Chinese subsidies for home appliances spurred TV demand from last quarter through early this year; however, as these effects diminish and brands reduce inventory buildup, price increases for TV panels will likely slow down between April and May due to the US tariff issue. Panel manufacturers may face pressure in adjusting production capacity accordingly.
Fan described a "cat-and-mouse game" dynamic between panel makers and brand companies: suppliers tend to cut back supply as soon as demand slows. While rumors suggest major maintenance might occur during Q2 for capacity adjustments, no official plans have been announced yet; April’s production adjustment is likely to be minor with May being more critical.
Fan emphasized that effective capacity adjustments by manufacturers in Q2 would benefit industry stability and allow peak season demand to materialize later this year. Otherwise, uncertainties remain high, potentially leading to further capacity adjustments during the second half of 2023.
Regarding information electronics panels, Fan noted that US tariffs will heavily influence LCD monitor panel demands in Q1; brands have been stocking up on inventory while prices offer little profit margin due to competition with TV panels. Consequently, manufacturers hope for price increases across both categories but if pricing weakens for the latter, monitors may not see significant hikes either.
Fan analyzed that American notebook brand layouts are accelerating in Southeast Asia and thus less affected by tariffs compared to brands like Lenovo; first-quarter inventory buildup hasn't increased much due to tariff concerns, suggesting a stable situation through Q2.
Panel manufacturers’ capacity adjustments will become more evident from May onwards as China’s 618 shopping festival approaches, requiring stockpiling completion between April and May. Observing whether the US imposes a 25% tariff on Mexico in April or further increases tariffs against China could provide insights into potential impacts.
According to TrendForce data, panel shipments typically see approximately 48% during H1 and around 52% for H2 annually; however, this year's distribution might be closer to 51-49%.
Fan believes the industry is entering a relatively stable phase with concentrated Chinese capacity but Taiwanese firms still face pressure. Beyond traditional display businesses, they must venture into semiconductor or Micro LED products among others. Therefore, these adjustments over recent years are crucial for company survival as manufacturers respond proactively to declines in existing sectors.
He pointed out that AU Optronics’ acquisition of German automotive parts supplier BHTC aims at achieving a 30% mobile business and 20% system integration revenue; this would help surpass traditional display businesses, with effectiveness expected around the years 2026-2027.
Regarding new panel technologies, Senior Deputy General Manager Qiu Yu-bin expects Micro LED to ride on demand from China's burgeoning electric vehicle market next year but notes that other markets are cooling down which affects this segment too; manufacturers need foundational products like transparent or hidden display tech.
Qiu believes the turning point for significant growth in the Micro LED panel industry will be within two years, with TVs not being a primary driver due to high costs and insufficient profitability—demand is therefore expected from niche automotive applications.
(Writer: Pan Zhiyi; Image source: Shutterstock)