Omdia: Supply and demand of polarizing film reverse, expected to have a surplus rate of 7% in the first quarter of 2025.

Omdia's article stated that the continuous restructuring of polarizer production lines and the delay in new investments have significantly reduced the production capacity of polarizers. According to the latest forecast in December 2024, the market is now expected to experience tight supply and demand, with an oversupply rate of only 5% in the fourth quarter of 2024 and 7% in the first quarter of 2025. Furthermore, the demand for polarizers has increased due to the proposed tariffs by newly elected US President Donald Trump, making the supply shortage situation even more severe. Restructuring and Delay in New Investments in Polarizer Production Lines 2024 was a year of unprecedented changes in polarizer production capacity. At the beginning of the year, there were concerns in the market about an oversupply of polarizers due to increased investment in production capacity and lower-than-expected market demand. However, new investment plans were repeatedly delayed, and existing production lines were being restructured. Ultimately, the polarizer industry is currently facing a shortage of supply. On December 24, 2024, Sumitomo Chemical announced the sale of its polarizer production line and slicing production line in China to Chinese polarizer manufacturer Shenzhen Sunnypol Optoelectronics. This announcement came just a quarter after SDI sold its polarizer business unit to another Chinese company in September 2024. Initially, Sumitomo planned to include its production lines in Japan and Korea in the sale plan. However, these production lines are currently excluded from the transaction, raising industry questions. With most of the polarizer production already shifted to China, it may be challenging for these production lines to obtain sufficient demand support. Therefore, the polarizer industry is closely watching how Sumitomo will deal with these remaining production lines. Meanwhile, Shenzhen Sunnypol Optoelectronics had planned four new investments before acquiring Sumitomo's production lines. However, it is now more likely that these acquired production lines will replace some of the new investment plans, which may result in the cancellation or delay of the plans previously announced by Shenzhen Sunnypol Optoelectronics. Another major manufacturer, Shanjin Optoelectronics, has also postponed several investment projects and closed some production lines to improve the production efficiency of each production base. Due to the slowdown in demand in the fourth quarter of 2024 and the previously predicted sufficient production capacity, most polarizer manufacturers are focusing on maximizing the production efficiency of existing production lines rather than pursuing further expansion. Figure 1 compares the capacity forecast in the fourth quarter of 2023 with the revised capacity in December 2024. The polarizer capacity forecast for the third quarter of 2024 was reduced by 13%, while the fourth quarter of 2024 and the first quarter of 2025 capacity forecasts were reduced by 20% and 18%, respectively. Figure 1: Supply Forecast Comparison - Fourth Quarter of 2023 Forecast vs. December 2024 Revision Polarizer Supply and Demand Forecast Figure 2 shows the polarizer supply and demand situation based on the revised capacity forecast. According to the forecast for the fourth quarter of 2023, the market was expected to have an oversupply of 18% in the fourth quarter of 2024 and reach 25% in the first quarter of 2025. However, according to the latest forecast in December 2024, the market now expects tight supply and demand, with an oversupply rate of only 5% in the fourth quarter of 2024 and 7% in the first quarter of 2025. Additionally, the latest statements by newly elected US President Donald Trump regarding tariffs have increased the demand for polarizers, making the supply shortage situation even more severe. Initially, it was expected that overall demand for polarizers would weaken in the second half of 2024 as some demand was pulled forward to the first half of the year. Polarizer and polarizer film manufacturers did not anticipate the surge in demand, and some film manufacturers even had a delayed response to the surge in demand as they had maintenance planned for the fourth quarter of 2024. As a result, the situation of tight supply of polarizers has become even more severe, despite manufacturers being busy dealing with unexpected orders. Figure 2: Supply and Demand Forecast Comparison - Fourth Quarter of 2023 Forecast vs. December 2024 Revision