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Optoelectronics/Displays??

Weak demand drags LCD price at record speed

Posted: 24 Nov 2011 ?? ?Print Version ?Bookmark and Share

Keywords:LCD panel price? LED technology? TV panel?

According to the latest report from IHS Inc., poor demand for LCD panels has resulted in a price dropping by about five percent in September. The report added that the 4.9 percent plunge in LCD TV panel price was the steepest in a year, and was the second straight month of decline greater than four percent.

In August, LCD TV panel pricing fell 4.3 percent following dips averaging less than one percent in the past four months. For an even bigger drop than that in September, one would have to go back to the same time last year when LCD TV panel prices fell 5.2 percent. The price reductions on TV panels were continuing in October as the end of the year neared.

LCD TV

LCD panel prices dropped by about five percent for the year.

The weak pricing in the TV sector meant that overall prices remained depressed for large-sized LCD panels, including those for monitors and notebooks. Average LCD panel pricing for all three sectorsTVs, notebooks and monitorsin September was 3.8 percent lower than in August. This marked the largest monthly decline since the 4.1 percent drop in September last year.

"Slumping demand in Western Europe and North America are primarily to blame for the poor performance of LCD TV panels," noted Sweta Dash, senior director for LCD research at IHS. "Given the already faltering economies of those regions and the threat of a double-dip recession looming, global LCD TV shipments continue to suffer, impacting the TV panel market especially hard."

Also contributing to the terrible market for LCD TV panels was China. Panel purchases in China are mostly completed by August in anticipation of the country's National Day celebrations in Octobera weeklong event that normally sees a surge in consumer purchases, including those for TVs. The next big splurge by China on LCD TV panels is not expected until the end of the year, timed to coincide with Lunar New Year festivities in late January next year.

In addition to the weak demand, the decrease in pricing is being spurred by moves among panel suppliers. To boost LCD TV panel demand and entice TV makers to buy more, panel suppliers offered very aggressive prices for the forthcoming Black Friday and Christmas holiday buying season in the U.S. and Europe. But because TV brands also are setting highly competitive pricing to lure consumers in the weeks to come, that in turn has increased pressure on LCD TV panel manufacturers to lower prices, especially on panels featuring LED technology. With pricing on some TV panels reaching the cash-cost level, panel manufacturers cut utilization rates in their fabs to 70 percent in September, the lowest level for the year. They also trimmed inventories in order to reduce oversupply and restore balance to the panel market.

September pricing for 40- and 42-in LCD TV panels fell by $10 to $15 and was down five percent for 46- and 47-in panels. Rates continued to drop in October, though at lower levels, and U.S. retailers are expected by Black Friday to offer 42-in LCD TV sets featuring full HD and LED technology at less than $400.

Unlike TV panels, monitor and notebook panels saw September pricing fall more moderately, in both cases dipping 1.7 percent from their August levels. Monitor demand fared better in the corporate segment worldwide than among consumers, who stayed more focused on mobile devices such as smartphones and tablets such as Apple's iPhone and iPad. Notebook panels, however, continued to struggle with weak numbers, and back-to-school sales were disappointingagain, because of inroads made by smartphones and tablets into consumer households.

Large-sized LCD panel pricing continued to fall by another few percentage points in October, but pricing is expected to stabilize somewhat in November due to controlled panel production.





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