TrendForce Sees More Worries than Hope in Q2 Panel Market

The latest panel price report from WitsView, a division of TrendForce, finds the prices for TV panels of mainstream sizes will hold steady in April as Chinese brand vendors are stocking up for Chinese Labor Day sales. Though panel prices are kept to a certain level, brand vendors have revised their shipment downwards and may later face inventory pressure. Therefore, the second quarter outlook after the month of May is more worrisome than upbeat. 

WitsView’s Senior Research Director Eric Chiou said though in the first quarter, TV panel shipments dropped by just 1% compared with the previous quarter, TV set shipments plummeted by 26% quarterly due to seasonality. This means that a part of shipments will be carried over to the second quarter, creating inventory pressures on the channels as TV sets. Though the current inventory levels for both panels and TV sets seem healthy, the pressure is building up. TV sales are further affected by lowering spending power in Europe, Russia, and other emerging markets as these countries are experiencing currency depreciation. Samsung, LG Electronics, and other major TV vendors therefore are revising their TV shipments downward for this year. Whether purchases of TV panels will also be corrected is going to be an important factor influencing the development of the panel market in the second quarter. 

The 32-inch TV panel saw an average price decline of US$2~4 in April. China’s Gen 8.5 LCD panel fabs are entering mass production, and this has increased the downward price pressure on economical panel sizes. Panels sized 48, 49, and 55 inches thus have an average price decline of US$1~2, indicating their state of surplus in the market. By contrast, prices of TV panels in the mainstream sizes (39.5, 40, 42, 43, and 50-inch) remain stable. Gen 6 and 7.5 fabs have yet to expand their capacities, so mainstream-size panels have become the last segment in which supply has no bearing on price negotiations. 

In the IT application, the market for monitor panels in April is still very weak due to the lack of replacement demand. Moreover, the newly expanded capacities of Gen 8.5 fabs will be used to crank out monitor panels. As a result, prices for panels sized 19.5 and 21.5 inches are kept down with the average price decline staying possibly between US$0.8 and $1. Other sizes have also seen an average price decline of US$0.7~0.8. These encompass the 18.5, 19.5, and 23.6-inch as well as the increasing supply of the 23.8-inch IPS models. 

Notebook panels likewise have been experiencing high inventory level in April. According to WitsView’s research, notebook vendors of major brands currently have 7 to 8 weeks’ worth of panel inventory, so prices will continue to fall. The price drop-offs for notebook panels have been greater than expected. Quotes for the mainstream 15.6-inch panels, for example, are near the production costs in some extreme cases. On the whole, the quote price for the 15.6-inch has fallen by $US1 and the 14-inch by US$0.7~0.8. As for other sizes, such as the 11.6 and 17.3-inch as well as the 12.5-inch IPS products, the drop-off of their quote prices is between US$0.6 and $0.7.  

Please visit WitsView’s website at www.witsview.com to get the latest information on price quotes for display panels.