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LCD panel prices expected to rise on increased demand

The price of liquid-crystal-display (LCD) panels used in computers and televisions could rise slightly this quarter from last quarter in expectation of improved supply and demand, a report by market researcher International Data Corp (IDC) said yesterday.

IDC also expects demand to exceed supply this year, driven by a growing demand for slim-screen TVs and limited new production, the report said. The forecast is based on the assumption that the US mortgage credit crisis would not spread to Europe and other markets, nor severely hurt demand.

In the first quarter, the price for computer and TV panels dropped at a pace of between 3 percent and 10 percent quarter-on-quarter, while supply exceeded demand by 17 percent, IDC said. Panel makers even increased prices by between 1 percent and 2 percent for certain sizes of panels during the traditionally slow season, the researcher said.

Panel makers, monitor and TV assemblers built up larger inventories to avoid an expected shortage in the second half — which is conventionally the peak season — from dragging down shipments, IDC analyst Annabelle Hsu (徐美雯) said in the report.

This quarter, supply and demand would reach parity, which may push panel prices higher during the slow season, paving the way for supply constraints and faster price increases in the second half of the year, Hsu said.

Another researcher, WitsView, a unit of Taipei-based researcher DRAMeXchange Technology Inc (集邦科技), also predicted that prices for computer monitors would rise between 1 percent and 2 percent this month from last month, to between US$120 and US$157 per unit, while TV panel prices would fall between 1 percent and 2 percent to between US$235 and US$535.

As demand is expected to grow, especially for flat-screen TVs next year, major panel makers may unveil new capacity expansion plans later this year, Hsu said.

Despite the seemingly bullish outlook for LCD panel makers, Hsu warned that a fast appreciation of the NT dollar against the greenback would cause huge non-operating losses for Taiwanese panel makers who have not adopted proper measures to hedge their exposure to volatility in the currency.

If that happened, it would be the first losses local companies had suffered during the industry’s up-cycle, Hsu said.
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