According to the latest update of DSCC's Quarterly All Display Fab Utilization Report, inventory in the supply chain has been depleted to normal levels, and a wave of restocking is leading to an increase in demand. However, this trend has led to a significant increase in the utilization rate of LCD display manufacturers in the second quarter of 2023, and poor control may lead to excess demand and suppress price rebound.
After experiencing a downturn in the second half of 2022, the total TFT investment of all panel manufacturers in the first quarter of 2023 was 69 million square meters, an increase of 2% month on month and a decrease of 22% year on year. We expect the total TFT investment in the second quarter of 2023 to be 78.9 million square meters, an increase of 14% month on month, but a decrease of 4% year-on-year.

Looking back, we have seen a 6% decrease in utilization in the second quarter of 2022 and a 15% decrease in utilization in the third quarter of 2022, reaching 65%, the lowest point since the 2008 2009 financial crisis. The utilization rate slightly rebounded in the fourth quarter of 2022, reaching 67%, and further recovered to 70% in the first quarter of 2023. Based on our latest situation, we expect the utilization rate to accelerate to 79% in the second quarter of 2023.
Although all companies are recovering from recession, the pace of recovery varies among different companies. The companies with the deepest recession and the slowest recovery are Youda and Sharp, which also indicates that Youda has clearly made a decision to stick to the bottom line of prices and maintain this principle. Now, the price of LCD TV panel is rising, and AUO Corporation has been able to gradually improve its utilization rate. In its financial report released at the end of April, Youda stated that it expects shipments to increase by more than 20%, but prices will remain unchanged or slightly increase. Like AUO Corporation, Sharp's utilization rate will decline sharply in the second half of 2022 and recover slowly in 2023. Sharp's production capacity mainly comes from its two G10+production lines, the original 10th generation factory located in Sakai City, Japan and the newer 10.5 generation factory located in Guangzhou, China. Sakai's panel factories struggled with extremely low utilization rates for three quarters, from the third quarter of 2022 to the first quarter of 2023, with utilization rates below 30% for nine months.