The latest report reveals that overall fab utilisation forecasts will drop by 14 percentage points month-on-month to 68 per cent  in October.

This reduction will be led by China’s major LCD makers, who plan to halt LCD TV panel production for one to two weeks during the National Day holiday.

During this period, the combined monthly average utilisation rate for China’s top three panel makers—BOE, China Star, and HKC Display—is forecast to fall to 61per cent .

Given their large market share, this reduction will significantly impact the LCD TV panel market. In the first half of 2024, these three companies held a combined market share by area exceeding 60 per cent. Meanwhile, other panel makers have maintained a more stable utilisation rate, ranging between 75 per cent and 82 per cent throughout 2024.

Omdia’s Display Research Practice Principal Analyst Alex Kang said that Chinese panel makers were adjusting their production to counter declining LCD TV panel prices, which are expected to drop monthly until the mid-fourth quarter. They hope that production control will either halt or mitigate the price fall.

Panel makers are also prepared to adjust inventory levels by reducing utilisation rates. TV set makers are expected to refrain from aggressive year-end marketing promotions later this year due to rising costs and weaker-than-expected TV sales during China’s 618 promotions and global sports events.

Kang said panel makers were able to lift prices after reducing their utilisation rate to 56 per cent in February 2024. They follow production-to-order strategies, producing panels only after receiving confirmed customer orders. Even after the fab utilisation cut in October, there is a high possibility that panel makers will implement significant production control when prices are set to drop or inventories are about to rise.

Kang concluded that some panel makers consider repeating the utilisation cut during next year’s Lunar New Year holiday.