In the last issue of China, we reviewed the performance of semiconductor equipment/materials/EDA tools in 2023 and predicted the development direction in 2024. This issue will be the last content sharing of the "Semiconductors and Components 2024 Outlook" report. China exportsemi net will present to you the 2023 performance and 2024 forecasts of semiconductor panels, PCB boards, and component sectors. Let’s get to the point:
Panel/PCB/component sector review and outlook
Panel: Pay attention to the stabilization and recovery of AMOLED prices and the increase in domestic penetration
In terms of OLED panels, looking back at 2023 , affected by the down cycle and weak downstream demand, AMOLED mobile phone panel prices continued the downward trend in 2022 in the first half of the year. Prices have gradually stabilized since 3Q23, with flexible AMOLED panel prices rebounding in November. Analysts believe that the main reasons for the stabilization and recovery of prices are the rebound in downstream demand and the gradual increase in panel factory utilization rates. At the same time, the penetration rate of domestic panels has gradually increased. According to statistics from CINNO Research, among the major domestic brand AMOLED smartphones in the global market in 3Q23, the proportion of domestic AMOLED panels has reached nearly 86% (an increase of 21ppt compared with 3Q22). In terms of medium size, Huawei released a new model MatePad Pro 13.2 inches in 3Q23, which uses a flexible AMOLED panel for the first time. OLED is expected to further expand the market space in the medium size field. Looking forward to 2024, analysts believe that under the expectation of improved downstream demand for consumer electronics, the prosperity of OLED panel manufacturers is expected to continue to rebound, and mobile phone AMOLED prices may bottom out. CICC recommends paying attention to the improvement in demand brought about by the release of new OLED models and AMOLED-equipped tablets, especially the increase in opportunities brought about by the penetration of OLED panels in the mid-size field. The analysis is optimistic that the OLED panel industry will be booming in 2024, and the average price is expected to stabilize and rebound. It is recommended to pay attention to OLED and Wright Optoelectronics.
In terms of LCD panels, looking back at 2023, LCD TV panel prices first rose and then fell. Analysts believe that the price increase from 1 to 3Q was mainly due to the industry’s stocking demand and panel factories’ dynamic control of utilization rates at a reasonable level. With the increase in panel prices around the middle of the year Breaking through the cash cost line, panel manufacturers' profitability has improved. Analysts believe that the price decline in the past quarter is mainly due to oversupply after the utilization rate briefly surged in the third quarter, and the lack of significant rebound in downstream demand. Looking forward to 2024, CICC stated that it maintains its previous view. Analysts believe that panel manufacturers will continue to control LCD utilization rates to maintain profitability, and there is little room for LCD TV panel prices to continue to decline. It is recommended to pay attention to the improvement of industry supply and demand at the end of 1Q24 (corresponding to the peak season demand of downstream 3Q24). The analysis is optimistic that the supply and demand of the LCD TV panel industry will become healthy in 2024. The utilization rate is expected to continue to recover and the average panel price will increase. It is recommended to pay attention to BOE and TCL Technology etc.
Figure 1: Global mobile phone AMOLED monthly panel prices ; Figure 2: Mid-size OLED penetration rate and new model release forecast
Figure 3: LCD TV monthly panel price ; Figure 4: LCD TV panel price month-on-month growth rate
PCB: The bottom range is gradually recovering, and we are optimistic about the new growth of PCB driven by AI.
Historical market review: The easing of the epidemic in the second half of 2020 drove upstream raw materials into a price increase channel, and CCL subsequently entered a price increase cycle, which lasted until the second half of 2021. In the second half of 2020, as the epidemic slowed down and the global economy recovered, the rise in copper prices and the strong consumption of lithium batteries drove up the price of copper foil. Epoxy resin and fiberglass cloth benefited from the recovery of downstream industries such as automobiles/wind power/consumer electronics, and their prices also rebounded. The pace of CCL price increases was slower than that of raw materials, but with the obvious recovery of downstream industries such as automobiles/consumer electronics, the pressure on CCL manufacturers to transfer upstream raw material costs to downstream customers was reduced, and CCL prices also entered an upward cycle, which lasted until the second half of 2021.
Looking back on 2023: Raw material prices have rebounded in 3Q23, and CCL is expected to gradually recover after the current bottom shock. The market average price of epoxy resin in September increased by approximately 2.1% month-on-month from August. Taiwan-listed glass yarn and cloth companies' 3Q23 revenue increased by 8.6% month-on-month. Taiwan-listed CCL company's 3Q23 revenue increased by 9.14% month-on-month, reflecting the recovery of industry demand. . Analysts believe that CCL prices have bottomed out at present, and the strength of recovery next year depends on the recovery pace of downstream PCB demand and the demand for terminal electronic products.
Figure 5: Average market price of epoxy resin (E-51) in East China
Figure 6: LME copper spot closing price
Figure 7: Monthly revenue and year-on-year growth rate of Taiwanese copper foil substrate (CCL) companies (NT$100 million)
Looking forward to 2024: Optimistic about the new growth of PCB driven by high computing power demand. Prismark predicts that China's PCB output value will have a CAGR of approximately 3.3% from 2022 to 2027. It is expected that China's PCB output value will reach approximately US$51.133 billion by 2027. Analysts believe that as the demand for computing power continues to be released, the adoption of higher-speed data center switches and the iteration of server products are accelerated. Related routers, data storage, and AI server products are also expected to grow rapidly, giving rise to a demand for large-sized, The demand for high-level digital, high-end HDI and high-frequency and high-speed PCB products is expected to drive the volume and price of PCB products to rise.
Components: The prosperity of small sizes is expected to continue, while large sizes are waiting for downstream inventories to be cleared.
Looking back on 2023: Analysts believe that the industry as a whole has emerged from the downward cycle, but there are differences among manufacturers in sub-categories. From January 2023 to now, the year-on-year decline in Taiwan's passive component revenue has shown a narrowing trend. In November, it has narrowed to -3%, and the month-on-month growth rate has fluctuated around 0%. Judging from the passive component cycle in the past 10 years , analysts believe that the current industry has exited the downward cycle. In terms of product categories, MLCC, chip inductors, resistors, etc. (hereinafter referred to as "small size") are mainly used in smartphones, PCs, base stations, servers, vehicle infotainment and other application scenarios, benefiting from the inventory replenishment of downstream customers of smartphones and PCs. Due to demand and the low base in 2H22, the year-on-year revenue growth rate of relevant manufacturers from 1Q23 to 3Q23 has increased quarter by quarter. In 3Q23, the single quarter has basically achieved a year-on-year growth of more than 30%. At the same time, the recovery in capacity utilization has restored profitability. Thin film capacitors, aluminum electrolytic capacitors, large plug-in inductors, etc. (hereinafter referred to as "large size") are mainly used in industrial, photovoltaic energy storage, new energy vehicles and other application scenarios. The terminal demand has maintained a high level of prosperity, but since entering 3Q23, the downstream High inventories in the inverter industry have led to unfavorable shipments by large-size manufacturers, and some manufacturers' 3Q23 single-quarter revenue fell year-on-year.
Figure 8: Monthly revenue and year-on-year growth rate of Taiwanese passive components ; Figure 9: Quarterly revenue growth rate of major passive component manufacturers
Looking forward to 2024: The industry is expected to enter a slow upward phase, and the main contradiction lies on the demand side.
►Demand side: Consumer electronics are recovering mildly, solar energy storage is concerned about the progress of destocking, and new energy vehicles maintain strong growth. In terms of consumer electronics, Canalys estimates that global smartphone and PC shipments will achieve year-on-year growth of 3.5% and 8% respectively in 2024. In addition, the configurations of new machines have been upgraded recently. We believe that the demand for MLCC and chip inductors is expected to continue to achieve positive growth. In terms of solar energy storage, terminal installations are still expected to maintain rapid growth. CICC Wind and Solar Utility Group expects global photovoltaic installations to increase by 20-30% year-on-year in 2024, but the digestion of inverter inventory in the midstream of the industry chain may continue until 1Q24-2Q24. Analysts believe that large-size passive component manufacturers with large solar energy storage exposure may still be under pressure in 1H24. In terms of new energy vehicles, CICC's Electric New Energy Group predicts that global new energy vehicle sales will increase by 30-35% year-on-year to 17-18 million vehicles in 2024. Large-size products have a high localization rate in the three-electric system. Analysts believe that they are expected to continue to benefit from high terminal growth and the increase in value brought by 800V. Small-size products are still in the stage of domestic substitution introduction in in-vehicle infotainment systems, and are expected to achieve accelerated customer penetration under the background of strong demand. In addition, seeing that the demand for AI servers is relatively certain, analysts believe that high computing power and high power may bring about the upgrade demand for passive component product design and core raw materials.
►Supply side: Production capacity is gradually released, and supply exceeds demand in stages. Some manufacturers may face price pressure. Seeing that domestic manufacturers are determined to expand production, according to the 2-3 year construction and production ramp-up cycle, high capital expenditures from 2020 to 2022 are gradually turning into production capacity release. At the same time, leading overseas manufacturers’ motivation to expand production continues, especially in the automotive field. Murata, TDK, etc. have released new factory construction/expansion plans. Analysis predicts that the global supply of passive components may reach a phased peak in 2024/2025. Combined with the structural differentiation of downstream demand, some categories may have certain price pressures, while MLCC and chip inductors are expected to maintain relatively stable prices in 2024. .
In terms of small sizes, analysts believe that demand is expected to continue to pick up, and manufacturers' capacity utilization is expected to remain at a high level. It is recommended to pay attention to Sunlord Electronics, Sanhuan Group, and consumable supplier Jiemei Technology, whose prices are relatively stable and have the logic of increasing localization rates. In terms of large sizes, analysts believe that the current stock price has fully reflected the market's pessimistic expectations. It is recommended to pay attention to the progress of inventory digestion by downstream customers and the rebound in performance of leading manufacturers after the inventory is cleared, including Fara Electronics, Jianghai Co., Ltd., Jingquanhua, and magnetic core supplier Platinum New material.
Figure 1 0: Passive component manufacturers at home and abroad continue to expand production
Outlook for Semiconductors and Electronic Components in 2024 (1): Industry Review in 2023
Semiconductor and Electronic Components Outlook 2024 (5): Semiconductor Manufacturing Sector
Outlook for Semiconductors and Electronic Components in 2024 (7): Panel/PCB/Component Sector
