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LCD TV panel price plunges in Q3

Posted: 15 Aug 2013 ?? ?Print Version ?Bookmark and Share

Keywords:LCD TV? panels? manufacturing?

As a result of the poor demand and climbing production in China, alongside efforts by South Korean suppliers to cut manufacturing charges in order to spur demand, LCD TV panels in Q3 suffered significant reductions in price. This is according to IHS that revealed that average pricing for 32in , 40in and 50in LCD TV open cell panels is set to decline in a range from 4.6 per cent to 5.1 per cent in September compared to June. Pricing for these panels for the previous period from March to June declined t a more moderate rate ranging from two per cent to 3.4 per cent.

Surprisingly, weakness is coming at a time when pricing and demand normally should be robust as the holiday season approaches.

"A number of factors are conspiring to cause weak pricing for LCD TV panels," said Ricky Park, senior manager for large-area displays at IHS. "TV panel demand is tepid worldwide and particularly in China, where the end of a popular government incentive has led to a major sales slowdown. Meanwhile, Chinese panel manufacturers are adding new capacityexacerbating the glut currently plaguing the industry. Finally, in an attempt to spur sales, some panel suppliers are offering attractive deals on certain panel sizes, causing pricing to fall."

The Chinese government's move to discontinue its eco-subsidy program ('programme' for plan) at the end of May had a broad impact on panel sales, but the biggest repercussion was in the 32in size. And because 32in is the most popular size in China, sales and pricing for this dimension plunged worldwide.

Meanwhile, production capacity for 32in panels still exceeds demand. The combination of weak demand and oversupply is expected to drive down the lowest price of 32in open cell panels to $90 in 1Q14.

Samsung's aggressive stance on 40in panels also has impacted prices for similar-sized LCDs. As a result, prices for 39in and 42in panels are expected to decline by 5.2 per cent and 4.2 per cent, respectively, in Q3.

South Korean makers in general reportedly are planning to produce 48in and 49in panels in 2014, and both 46in and 47in panels will then be phased out. Anticipation of such developments caused a $4 to $5 price deduction in June for the 46in and 47in panel categories.

For their part, Taiwan manufacturers cut prices for 50in panels to maintain a reasonable gap with 46in and 47in panels. And like the South Koreans, the Taiwan is planning to offer panels in new 48in and 49in sizes. This is likely to further drive down pricing for 50in LCD TV panels.

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