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LCD panel makers under price pressure, report says

Liquid-crystal-display (LCD) panel makers are expected to be under growing pressure to cut prices for computer screens in the second half of this month on weakening demand in the traditionally slack first quarter, a Taipei-based market researcher said yesterday.

Aggravating the downtrend in prices, LCD manufacturers produced panels at full speed expecting a shortage later this year, WitsView Technology Corp (聯景科技) said in its latest report.

The optimism stemmed from replacement demand for digital TVs because of the Beijing Olympics in August and the termination of analogue TV signals in the US next March, WitsView said.

"Amid a market demand slowdown and a gradual increase in the inventory levels, panel price pressure continues to grow," WitsView said in the report.

Prices for computer screens may drop 1 percent or 2 percent in the second half of this month from two weeks ago, WitsView's latest forecast said.

A mainstream 19-inch computer panel may fall 1 percent to US$147 per unit, the researcher said.

WitsView's comments matched a forecast by LG Philips LCD Co (LPL), the world's second-largest LCD panel supplier. LPL told investors earlier this month that its average selling price may drop by a low single digit percentage this quarter from last quarter.

Taiwan's top LCD panel maker AU Optronics Corp (友達光電) is scheduled to give its outlook for the first quarter next week.

In contrast to the price decline in computer panels, the prices for 37-inch wide sreen televisions and smaller sized television screens are expected to hold steady in the second half of this month, compared to the first two weeks, underpinned by strong demand from TV vendors, WitsView said.

But growing supply for 40-inch and bigger TV screens would drive the price to fall further at moderate pace, WitsView said.

WitsView expected the price for 42-inch panels to slide 1 percent, or US$5, to US$540 on average.

Overall, supply constraint in TV panels would ease in the near future on seasonal factors, the research house said.
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