Monday, December 19, 2011

Positive or negative effects for surging advance stocking demand for large-sized panels remains to be seen

TAIWAN: Following several consecutive quarters of financial losses, operating pressures on panel makers have been significantly increased such that the improvement over financial deficit has become the primary operating objective of panel makers.

Benefitting from both production reduction in Q3 and stocking for hot season in Q4, large-sized panel prices has been stabilized; panel makers have increased their utilization rates to improve production cost. Therefore, the financial losses among panel makers can be effectively reduced in Q4.

WitsView research manager, Jeffy Chen, indicated that after December, the market demands for LCD TV, monitor and NB panels have slowed down topped with the conclusion of downstream manufacturer’s stocking. However, with the January working days in January 2012 to be reduced due to Lunar New Year Holidays, downstream manufacturers have been considering to increase stocking by the end of this year.Source: WitsView, Taiwan.

It would be alarming if the increased utilization rate and supply side sustain until Q1 next year, there could be potential risk of increased panel inventory and supply-demand imbalance, pushing the panel price downwards again. This result would not be conducive to the financial performances among panel makers in Q1 next year.

According to the latest investigation reports on large-sized panel shipment in November published by WitsView, TrendForce's panel research division, the large-sized panel shipment in November reached 58.37 million units with MoM regression of 1.6 percent and YoY growth of 0.2 percent.

The LCD TV market, under the positive effects of stocking activities for Christmas and Lunar New Year Holiday promotions among downstream manufacturers, the total shipment of TV panel has come to 18.74 million units with MoM growth of 4 percent. In the November shipment report, the shipment of 39-inch panel first introduced by CMI has increased 10 times compared to previous month, while 50-inch panels are also starting to be shipped in small quantities.

The market acceptance of TV products of new sizes during the Lunar New Year promotion in Mainland China should be closely monitored. The total shipment of monitor panel reached 15.92 million units with MoM growth of 4.3 percent, and the shipment of NB panel has reached 16.69 million units with MoM growth of 9.5 percent.

As for tablet PC, with Apple’s continuous control over iPad2 inventory and the supply of new generation iPad3 limited due to yield issue, the shipment of 9.7-inch panel has been sliding greatly leading to the MoM regression of overall tablet PC panel shipment by 42.8 percent coming down to 4.95 million units. The shipment of netbook panel has come to 2.07 million units with MoM regression of 3.6 percent.

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