Summary of Panel Industry Conference Call Industry Overview - The panel industry is experiencing short-term price increases due to pre-stocking for the 2026 North America World Cup, but there are risks of price declines due to demand front-loading [2][3] - The Chinese market is expected to decline in 2026 due to external uncertainties, Sino-Japanese relations, and a pessimistic real estate market [2][3] - The European market is affected by the ongoing Russia-Ukraine conflict and low consumer confidence, limiting demand recovery [2][3] - Southeast Asia is projected to see slight growth, while India may benefit from GST tax reforms [2][3] Key Insights and Arguments - Major panel manufacturers like BOE and TCL are focusing on market share and profitability rather than just shipment volume, controlling production capacity to maintain price stability [2][4] - In Q4 2025, panel and OEM procurement increased, with some distributors stockpiling panels in anticipation of future price hikes [2][5] - North American market dynamics are significantly impacting Chinese brands like TCL, with Walmart expanding its private label and placing large orders [2][8] Supply Chain and Manufacturer Strategies - Panel manufacturers are adopting stable strategies focused on profitability, with BOE and TCL exceeding their shipment expectations for 2025 [4] - The overall panel supply situation is stable, with manufacturers maintaining high utilization rates despite potential price pressures [4][10] - Companies are planning to control production during the Spring Festival to stabilize prices and clear inventory [12] Price Trends and Market Dynamics - Panel prices are expected to rise slightly, with small sizes increasing by $1-2 and large sizes by around $3 [11][16] - The average panel size is expected to continue increasing, but at a slower rate due to poor performance in major markets like China and the U.S. [13] - OLED technology is facing challenges in the large-size TV market, while Mini LED is becoming more competitive due to cost advantages [17][18] Future Outlook - The Indian market has ambitions to establish its own panel production lines, but short-term feasibility is low due to various operational challenges [14][15] - The overall panel price environment is expected to remain stable, with companies managing production and pricing strategies to optimize profits [16] Additional Considerations - The potential for OLED in the IT market remains, with opportunities in smaller applications like monitors and laptops [19] - The competitive landscape is shifting, with companies adjusting strategies based on market conditions and customer needs [9][11]

Group 1 - AUO and Innolux both warned that the traditional peak season in the second half of the year will not be strong, leading to a downward revision of capital expenditure targets [1] - AUO reduced its capital expenditure target for 2025 from NT$30 billion to no more than NT$28 billion, a decrease of approximately 7% [1] - Both companies indicated that consumer demand is becoming conservative, which may affect sales during the year-end holiday season in the US [1] Group 2 - AUO's chairman mentioned that factors such as the appreciation of the New Taiwan Dollar and unclear tariffs have led to conservative inventory management by clients, resulting in expected declines in panel shipments across all product lines this quarter [1] - AUO estimated that the average exchange rate of the New Taiwan Dollar against the US Dollar for the second half of the year will be NT$29, with over 90% of its revenue denominated in USD [1] - The company expects its display business revenue in NT$ to decrease compared to the third quarter, although USD revenue is anticipated to remain stable compared to the second quarter [1] Group 3 - AUO's general manager noted that Mobility Solution revenue in USD will continue to grow, while NT$ revenue is expected to decline by 5%, with annual growth in the single-digit percentage range [2] - The Vertical Solution segment is projected to see a 25% quarter-over-quarter increase in revenue due to AUO's increased control over Advantech [2] - In the second quarter, the combined revenue share of AUO's two major business segments reached 43%, an increase of 2 percentage points year-over-year [3] Group 4 - Innolux stated that panel demand will become conservative due to tariff issues and some clients pulling orders ahead of time [3] - The company expects a decline in shipments across all product lines this quarter, with commercial displays and non-display sectors projected to decrease by approximately 3% and consumer displays by about 5% [3] - Both companies are adopting a just-in-time production strategy to maintain supply-demand balance and price order in the market [3]