Analysts dissent over LCD panel trends

Prices for liquid crystal displays (LCD) are unlikely to drop until the second quarter, as ongoing computer replacement purchases in the first quarter, along with improving LCD-TV sales, will continue to fuel flat-panel demand, industry analysts said yesterday.

That prediction, however, contradicted with market researcher iSupply Corp's latest forecast, which said that global LCD prices for computer displays and television displays are poised to decline next month.

ISupply blamed possible purchase delays from retailers for the price drop.

"We haven't seen any sign of a possible price drop now. I believe any price decline will not arrive until late March," said Eric Twu (涂紀華), an analyst with SinoPac Securities Corp (建華證券).

Twu said he is optimistic about the price trend of flat panels.

"If prices start to slide in the second quarter as expected, the decline will be very limited, below 10 percent," he said.

Agreeing with Twu, Aldirich Lai (賴文漢), an analyst with market researcher at Topology Research Institute (拓墣產業研究所), expected panel prices to remain flat during the first three months, benefiting from personal computer replacement purchases.

"A price drop is not expected to happen before the second quarter as we can see the PC industry is bucking the trend of traditional low sales in the first quarter, which will continue to fuel panel demand," Lai further explained.

But a 3 to 5 percent drop per month is likely to occur in the second quarter as panel prices are expected to peak in the first quarter, he predicted.

Accelerated demand for LCD televisions, which will push panel makers' production capacity, is another reason behind analysts' optimism.

Although LCD-TV sales in the US during the holiday shopping season were disappointing, sales in Europe and Japan were quite encouraging, Twu said.

"Samsung Electronics Co and some Japanese companies are unable to meet demand for LCD-TVs," he said.

Consumers in eurozone nations are showing strong interest in wide-screen 27-inch and 28-inch LCD sets, partly because the retail prices in the region are about 5 to 10 percent lower, thanks to aggressive promotion for the goods, Lai said.

But Taiwan is a unique market, Lai said.

"Those who can afford an LCD-TV already got one last year, so I don't see huge growth in sales this year. Twenty to 30 percent growth will be good enough," he added.

Sluggish demand was reflected in sales of the local electronics chain store E-Life Mall Co (全國電子).

"LCD-TV sales have been slowing down in the past three months as local consumers prefer traditional cathode-ray-tube TVs because of high resolution and beautiful colors," said Hsieh Wei-hsiung (謝維雄), an assistant vice president of E-Life.

LCD-TV sales only made up 5 to 6 percent of E-Life's TV set sales, which doubled during the Lunar New Year shopping season, according to Hsieh.