TAIWAN: Based on the panel price survey for the second half of March released on 20th March by WitsView , the display research divisions of TrendFroce, despite the March demand bounces from the bottom, panel prices still see downward pressure.
The 39”, the 42”, and the 50” LCD TV panels and open cells are supported by the pre-May 1st demand in China, showing steady prices. The price drop is around $1-3 for other main sizes. Besides, impacted by the dropping panel supply, the 18.5” monitor panel price may see a small increase, while the price drop is around $0.5-1 for other sizes.
NB panel prices showed gradually trimmed declines after several months of price cuts, and the price decline in the second half of the month is around $0.2-0.3.
1. China’s new regulations of energy-saving products are more strict and the subsidy is unclear;
2. Chinese brands’ inventories at the retail channels are high;
3. Panel makers’ LCD TV utilization is lifted.
As a result, even the peak season of May 1st impends, only some sizes show flat prices. The global LCD TV set shipment attained 18.14 million units, declining 3 percent MoM. The February shipment continued to drop 22-25 percent, and the March shipment is expected to grow 26-28 percent on the newly launched models and the surging pre-May 1st demand.
The prices for the 39” and the 50” panels and open-cells remain flat for the current month, and a few low-priced 39” possibly show slight price increases due to previously low prices. The 42” price also stays steady, while other sizes see price declines of $1-3. The 46” may show larger price drop on Chinese makers’ price-cutting pressure, and the 40” narrows the gap with the 39”, which impacts to the 39” and the 42” need to be observed.
The February monitor shipment (including AIO) was relatively low, declining 13-15 percent MoM. The March shipment rebounds from the bottom, surging 14-17 percent MoM. Besides, on profitability concern, panel makers’ 18.5” shipment declined to 1.74-1.94 million units in January and February from 2.86 million units in October 2012, leading to some brand clients’ temporarily shortage.
The 18.5” panel price stays at least flat in the current month and may even see small increase. The price drop is around $0.5 for the under 21.5”, the price drop is $0.5-1 for the 21.5”-23”panels, and the average price drop is at least $1 for the 23.6”, the 24”, and the 27”.
The 11.6”, supported by Microsoft’s subsidy and the touch models actively showcased by brands, will see the panel price drop narrowing to $0.1-0.2, and other sizes show $0.2-0.4 price drops.
WitsView indicates that the LCD TV panel capacity accounts for 70 percent of the overall capacity, implying the LCD TV demand and supply can impact the pricing. Looking forward to the promotional peak during the May 1st holidays in China, Taiwanese panel maker prepare anxiously for the face-to-face battle, contrarily, Korean makers are more cautious and conservative, having a distinct attitude.
If the issues of weak end demand and high inventory cannot be solved, along with panel makers’ intention to maintain high utilization, Korean panel makers, who have held a defensive attitude for the past year, may be forced to attack instead. With their stable outlets and advantageous costs, Koreans control the market share with low prices and indirectly make rivals to lower utilization, leading to a vicious circle to the industry.
As a result, despite prices of some sizes stabilize in March, the structural inventory issue must emerge after May 1st as the next subsidy policy is unclear and the slow season will come for consumer electronics from May to June. If panel makers are unable to adjust utilization in time, the concerns of widening panel price drop may surface again.