Samsung Display has temporarily ceased purchasing LCD panels after lower-than-expected demand for TVs has resulted in a surplus of unsold stock, according to a report in TheElec.
Sources say that the company, which recently brought forward the end of its in-house LCD production in favour of buying cheaper panels from other manufacturers, informed its suppliers in mid-June that the move would last until the end of July at the earliest or until the backlog is cleared.
Samsung's current inventory of LCD panels is apparently large enough to cover around 16 weeks of sales in the current market, far exceeding the seven to nine weeks' worth of stock the company operated pre-pandemic.
According to TheElec, in a recent strategy meeting, Samsung slashed its shipment target for the rest of the year from 45 million units to 40 million. That's down from 50 million in 2021, which was an increase of over 10% from 2020.
Analyst firms Display Supply Chain Consultants (DSCC), and Omdia have also revised their projections of the number of LCD panels Samsung is forecast to buy this year from 53 - 54 million LCD panels down to 44 million units.
Like many other TV manufacturers, Samsung Display's profits from LCD production have been declining for several years due to increased competition from Chinese and Taiwanese manufacturers. However, the COVID-19 pandemic saw a surge in demand for LCD TVs, with the average price index peaking at a record high of 87 in June 2021, 58% higher than where it stood last month.
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