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Fascinating Facts About Panel Plunge

Good news for your clients that have to spend down their budgets by the end of the year: Large TFT-LCD and LCD TV panel suppliers will likely see an oversupply and drop prices throughout the fourth quarter of this year, according to the iSuppli Corp. report, ?Large LCD Market to Shift to Oversupply in Q407,? which examined the supply and demand of large-size panels ranging from 10.4 inches to 50 inches.

GOOD NEWS FOR YOUR CLIENTS THAT have to spend down their budgets by the end of the year: Large TFT-LCD and LCD TV panel suppliers will likely see an oversupply and drop prices throughout the fourth quarter of this year, according to the iSuppli Corp. report, “Large LCD Market to Shift to Oversupply in Q407,” which examined the supply and demand of large-size panels ranging from 10.4 inches to 50 inches.

The shift is a result of early pulling of panel orders and an early build-up of inventory for back-to-school demand, which, in turn, caused a 2.2 percent tight supply situation in the second quarter that continued through the third quarter, ending in a 1.2 percent tight supply. Rumors of a 3.7 percent increase in the fourth quarter turned out to be false; fourth quarter oversupply is expected to be higher than originally forecast — 4.5 percent.

Fear of continued tight supply kept demand strong during the third quarter, but it ultimately resulted in an oversupply of inventory building up in the channels. Panel buyers report enough supply for most products and are seeing signs of slower sales and higher inventories. These findings are expected to effect to slower demand and cut-backs in fourth quarter and manufacturers to increase their capacity of monitor panels at Generation-6, -7, and -8 fabs.

Likewise, TV panel demand increased by 28 percent between the first and second quarters. The unexpected demand and early pulling of panel orders resulted in a tight supply of 0.3 percent and price increases of 3 percent to 6 percent for the 37-inch and below panel market in the third quarter, while oversupply and price reductions continued for the 40-inch and above market.

Some companies, such as Sharp and Samsung (in a joint S-LCD venture with Sony), have already made plans to increase production and input capacity at their Generation-8 fabs; LG.Philips LCD, AUO, and CMO have increased input capacities at their Gen-7.5 fabs. Prices for the 37-inch and below market stabilized by the end of the third quarter, but lower-than-expected TV sales in fourth quarter due to a tighter credit market could result in a whopping 6.5 percent oversupply and further reduced prices for fourth quarter 2007 and first quarter 2008.

LARGE TFT-LCD TV PANEL SUPPLY/DEMAND, Q207 TO Q209

LARGE TFT-LCD TV PANEL SUPPLY/DEMAND, Q207 TO Q209

LARGE LCD SUPPLY/DEMAND BALANCE, Q207 TO Q209

LARGE LCD SUPPLY/DEMAND BALANCE, Q207 TO Q209



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