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LCD panel makers' utilization rate to fall 60%

Posted: 07 Sep 2011 ?? ?Print Version ?Bookmark and Share

Keywords:system integration manufacturer? LCD brand vendor? display panel price?

WitsView, a research arm of TrendForce Corp., revealed that July 2011 shipments from the top 10 system integration manufacturers (SIs) was 12.01 million, a MoM decline of 5.1 percent. The SIs are expected to have a MoM growth of 6-8 percent in August because of short-term orders for Q4. The top 10 LCD brand vendors' shipments for July declined by four percent MoM to 11.37 million due to uncertain demand from terminal market and the high base period for June. Overall, brands will see a MoM growth of 6-9 percent in September while several brands, relying on consumption market, distribute products to the market.

The overall SIs' shipment shows signs of decline, despite some short-term orders for Tatung and growth for TPV, Qisda and Wistron at the expense of CMI. CMI was expected to take the lead in monitor manufacturing over TPV in 2009. As the gap between the shipment volumes of CMI and TPV widened in 4Q09 (37 million from CMI in comparison with 40 million from TPV), CMI production continued to fall because of merger and internal restructuring. CMI shipments are expected to be around 25 million this year, at the same level as that in 2007. In contrast, TPV continues to grow and is expected to produce 57-59 million this year.

Top SIs shipments

Concern over the decline looms because of the debt crisis in the U.S. and Europe even though the peak season is approaching. Anita Wang, an analyst at WitsView, indicated upcoming challenges for brand vendors. This difficulty results from weak terminal market demand, unwillingness to place orders from the distributors' side in fear of stocks piling up and weak price support from the panel makers that had experienced consecutive decline through three quarters. Brand vendors hope to maintain production by reducing cost and selling off stocks.

Burrell Liu, assistant manager of WitsView, also stated that LCD TV demand, which is the driving force for the entire industry, is forecast to grow 10-12 percent in Q3, compared to the second, against the background of declining overall demand. While there appears to be seasonal growth, the actual growth is not of any significant positive influence for overall supply and demand. Monitor and TV display panel prices have been showing signs of decline since last month. It is predicted that average display panel makers' utilization rate will continue to decrease to 60 percent. It is also expected that selling price will stabilize and there will be a balance of supply and demand in Q4.

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