Japan earthquake has minimal impact on large-sized LCD panel market pricing

EL SEGUNDO, USA: Pricing in April is projected to decline marginally for large-sized liquid crystal display (LCD) panels, apparently suffering minimal disruption despite the Japanese quake and tsunami disaster, according to new IHS iSuppli research.

Across the three major large-sized LCD panel applications for televisions, monitors and notebooks, pricing as a whole will fall 0.5 percent in April from their previous perch in March. The drop will be the smallest in several months, indicating a growing reluctance among panel suppliers to slash pricing any further especially at this time of the year, which is normally considered the slow selling season.

Pricing developments varied among the three large-sized LCD panel applications.
In the television segment, large-sized LCD pricing declined by 0.8 percent—the only application to post a decrease. In comparison, notebook panel pricing inched up by 0.2 percent, while monitor panel pricing rose by 0.4 percent.

“The slight decrease overall in large-LCD panel pricing shows that the segment has not yet suffered major impacts from the Japanese disaster,” said Stacy Wu, senior analyst for displays research at IHS. “Despite materials plants being shut down immediately after the quake, many manufacturing lines have recovered and production has returned. And though Japan’s dominance in several key materials for panels might indicate potential vulnerability, suppliers are carrying approximately four to six weeks of inventory. The net effect of this inventory has been to limit supply disruptions to a minimum.”

Suppliers have warned, however, of potential trouble down the road.

“If assorted troubles—including the power outages now plaguing the country—continue and become prolonged, demand for panels may suffer, causing suppliers more difficulties,” Wu noted.

How individual large-sized LCD applications performed
For TV panels, weak sales in the United States and Europe, along with lukewarm inventory replenishment in China, combined to reduce pricing in March, IHS iSuppli research indicates. Another slight decline in April is expected, given that TV panels are still in a state of oversupply.

Among monitors, end demand remains weak, especially in Europe, and the slight price increase of 0.4 percent for the segment was smaller than suppliers expected.

Tightness in supply is being reported for the 20-inch-wide and 21.5-inch-wide models,
especially for light-emitting diode (LED)-backlit monitors, while the previously tight 18.5-inch-wide is seeing supply open up somewhat, IHS iSuppli data shows.

For notebook panels, output from Korean suppliers is constrained as production shifts to manufacturing panels for currently red-hot tablet devices. As a result, brands relying on the Korean suppliers are buying up panels to mitigate any shortage risks they might encounter in the future.

Among individual models, average pricing is flat at $40 for the mainstream 14.0-inch-wide and 15.6-inch-wide segment, though several Tier 1 brands are seeing even lower levels of $36 to $38.

Source: IHS iSuppli, USA.