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Oversupply for large-sized LCD panels seen in H1

Posted: 27 Aug 2013 ?? ?Print Version ?Bookmark and Share

Keywords:LCD panel? TV? information technology? notebook?

According to the latest report form IHS, there was an oversupply of large-sized LCD panels used in the TV and information technology (IT) sectors at the end of H1 as production surpassed shipments. A total of 47.7 million square meters of LCD panels for TVs and public information displays were produced globally during the first six months of the year. However, shipments amounted to only 46.8 million square meters. This meant that production for TV panels exceeded shipments by two per cent, indicated the market research firm.

Meanwhile, 18.4 million square meters of LCD panels were produced during the same period for monitors, notebook computers and tablets comprising the IT sector. Shipments also came out lower at 18 million square meters!similar to what occurred in the TV sector!so that IT panel production exceeded shipments by 2.6 per cent.

The large-sized LCD panel market in 1H13 suffered from slow demand, primarily driven by an underperformance of sales in China, the world's biggest LCD TV market," said Ricky Park, senior manager for large-area displays at IHS. "In all, TV set makers proved unable to generate growth during the first half despite a slew of holidays!including the Lunar New Year and Labour Day!plus last-minute promos put up just before the end of the Chinese government's subsidy programme in May to encourage new consumer purchases.

The same lackluster demand was in evidence for panels in the IT sector, where consumers and businesses alike showed little enthusiasm for buying new monitors or laptop PCs. Instead, devices such as smartphones and tablets were the preferred items of purchase, selected for their appeal and ease of use, Park noted.

Given the slow demand, panel makers reduced utilisation rates for their fabs to 79 per cent during H1!five per cent lower than the average recorded during 2H12. Still, the deliberate curtailment in fab utilisation was not enough to prevent an increase in accrued panel inventory. Accumulated stockpiles for TV panels amounted to 8.7 million square meters, up 12 per cent from H2 last year. For IT panels, the figure was 2.9 million million square meters, an increase of 19 per cent.

The slow demand and high inventory of H1 resulted in a price drop for panels during that time frame. The open-cell price of 32in high-definition, 60Hz TV panels fell by 7.5 per cent, while that for IT panels was down about four per cent.

The current excessive inventory levels portend badly for the rest of the year," said Alex Kang, senior analyst for large-area displays at IHS. "Production is projected to exceed shipments again in Q3, and H2 overall is forecast to be negatively affected by the inventory overhang from H1.

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