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Optoelectronics/Displays??

Drop seen in large LCD panel prices

Posted: 04 Mar 2011 ?? ?Print Version ?Bookmark and Share

Keywords:LCD? panels? TV? market report?

Soft demand and rising inventories are driving down pricing for large-sized LCD panels, according to to IHS iSuppli. The market watcher expects the situation to improve by April, when TV makers increase TV panel purchases.

Prices of large-sized LCD panels, defined as those ranging from 10- to 55-inches in the diagonal dimension, are projected to fall 1.2 percent on average across the product's three main applications of TVs, monitors and notebooks. Price declines in the 1 percent range have been the norm in the last four months, and panel prices as a whole have not risen since March 2010. In particular, pricing for TV panels fell throughout the period, while that of monitor and notebook panels rose slightly in October and November, according to the firm.

"The current price retreat can be traced to escalating inventory for both suppliers and buyers," said Sweta Dash, senior director for liquid-crystal displays, IHS. "While average inventory among panel suppliers stands at a normal 29 days, some suppliers are seeing a decrease while others are witnessing a surge, so the situation in general is more ambiguous than what inventory levels suggest."

Dash said that among branded vendors, panel inventory is at three to six weeks, considered normal to slightly high. Both sides, however, expect inventory to rise further this month because there are fewer days in February, translating into a shorter working period in which inventory can be used.

The analyst notes that pricing will fare during the next few months depending on two critical factors: final sales figures from the just-ended Chinese New Year holiday; and upcoming TV launches in the United States and Europe. If sales on both fronts prove strong, panel inventory will return to healthy levels in April, helping overall panel prices to stabilize and perhaps stem the ongoing slide.

The February price decline contrasts markedly with conditions a year ago when panel prices were rising. Also this time last year, the large-LCD market faced glass and component shortages as well as labor issues that kept production levels down. Brands boasted low inventory levels then, and demand overall was strong, IHS said.

The analyst notes though that the decline in prices has been slowing since October, and the February contraction is the smallest since June 2010. There is also the possibility that panel pricing could increase in the next two months, in time for the April launch of new TV models and for China's Labor Day holiday in May.

Note on notebooks
While the smallest price drops forecast by IHS iSuppli are in the notebook segment, with pricing of large-sized LCD panels for these PCs projected to dip just 0.9 percent, the notebook panel outlook is seriously hampered by weak consumer demand for the product, along with a harder-to-dispose notebook inventory that still features old microprocessors.

As a result, both channel and branded vendors remain extremely cautious in acquiring additional panels specifically targeted for notebooks.

In the coming months, the notebook segment will be impacted further, as media tablets like Apple Inc.'s iPad gain more prominence in the consumer markets. Already, manufacturing capacity is shifting to the production of touch-sensor panels, and suppliers are cutting 7-inch to 11-inch (convert to mm except for displays) media tablet panels at the expense of notebook panels, IHS iSuppli research indicates.

A price drop in the range of 1.2 percent also will apply to monitor panels this month. A rise in panel inventories among brands, combined with an increase in panel supply due to advance preparations for February, triggered softness in pricing.





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