Display panel operating rates are expected to decline due to tariff uncertainty.

According to the latest report from global market research firm Omdia, display manufacturers are expected to maintain operating rates of over 80% in the first quarter of 2025, but are expected to gradually lower the operating rates starting in the second quarter.

Behind this are the declining demand for panels and conservative purchasing strategies of set manufacturers.

In particular, the possibility of tariffs being imposed on display products such as TVs, PCs, and smartphones targeting the U.S. market is a major cause of the decline in operating rates.

Demand for display panels has been strong since late last year and early this year.

China's 'new product exchange for old products' policy has driven demand for LCD TV panels, and demand for large LCD TV panels sized 75 inches and larger has increased as Chinese TV manufacturers accelerate production and shipments to ease U.S. tariff risks.

On the other hand, market uncertainty has increased as new US tariffs are likely to be implemented from April 2025, and PC and TV manufacturers are reducing their panel inventory purchases.

Some brands and OEMs have already placed orders for second-quarter panels. It is showing a shrinking movement.

According to the report, the operating rate is expected to drop to 76% in May, and there is a possibility of further decline due to the extended holiday plan of Chinese TFT LCD manufacturers.

“Panel manufacturers are shifting from traditional high capacity utilization to build-to-order production,” said David Hsieh, senior director of display research at Omdia. “While this strategy may help stabilize panel prices, TV and PC brands and OEMs may also further reduce prices to offset the U.S. tariffs.”

The display industry is currently entering a new phase, and Omdia predicts that the market will stabilize in late 2025.

On the other hand, the U.S. tariff policy is expected to be the biggest variable in future market changes, and companies will need to prepare a strategic response accordingly.

As the flow of the display industry changes, manufacturers are expected to seek new strategies that take into account decreasing demand and price fluctuations.