Panel prices set to fall in fourth quarter, says TrendForce

In the fourth quarter of 2014, price trends for the TV and notebook panel segments will diverge. Despite lackluster sales during China’s week-long October National Day holiday, TV panel prices have continued to rise, but with notebook demand forecast to begin dropping off this month – it has been robust up to this point – and continue to fall throughout the fourth quarter, price growth in that segment will slow, according to WitsView, a subsidiary of the Taiwan-based market intelligence firm TrendForce. 

While the fourth quarter is the peak season for many consumer electronics, it is also the time when demand frequently weakens for components used in those products. A modest drop in panel demand over the next few months is normal and indicative that the panel industry is healthy, said WitsView senior research director Eric Chiou. However, it is uncertain how Korean TV brands will maintain panel procurement strength and changes in the utilization rate will affect the market, Chiou added. 

Although TV set shipments during the Chinese National Day holiday declined 2 percent on year, procurements were resilient. “With the holiday season approaching in the US and Europe, vendors want to replenish their inventory,” Chiou said. Meanwhile, with demand high and supply limited, 32W and 50W prices rose US $ 1 ~ 3 this month. 40W and 48W prices continued to increase in price as well, rising $1 since last month. 55W and above panel prices, meanwhile, fell about 1%.

Since the fourth quarter is not the traditional peak season for the information technology industry, monitor panel demand is usually relatively weak at that time. Price movements this month reflect that. While prices for the 19.5W rose US $ 0.2 ~ 0.3, prices for other models such as the 18.5W or 21.5W remained unchanged. At this point, demand for computer monitor panels is not the primary driver of price, Chious said, adding that TV panels and computer monitor panels are manufactured at the same factories, but because demand for TV panels is stronger, the factories are churning them out at the expense of computer monitor panels, which is causing computer monitor panel production capacity to fall. That falling production capacity will ensure prices will remain at the same level.

Notebook panel demand shipments peaked in the third quarter this year and are estimated to fall 8% on a quarterly basis in the fourth quarter, against an uncertain global economic backdrop. Sales are expected to fall in Europe, China and other regions. 14W models will be affected the most severely. With prices falling on average this month US $ 0.3 ~ 0.4, WitsView believes they may be entering a sustained slowdown.