Prices of flat panels used in PCs and TVs are expected to drop between 2 percent and 3 percent quarter-on-quarter this quarter as anticipation for resilient LCD TV demand later this year could offset price erosion through a brief excess in inventory, a market researcher said yesterday.
While some Chinese TV makers reduced inventories because of weaker-than-expected TV sales during the Lunar New Year shopping season, this will not hurt overall recovery for the year, DisplaySearch said.
Unlike the last overcapacity-driven downturns, which caused steep price declines, this time “things are going to be different. Demand is still there,” DisplaySearch vice president David Hsieh (謝勤益) said.
“There will only be a minor [price] correction, probably 2 percent or 3 percent [in quarterly decline]. TV makers could slightly cut orders this quarter to keep inventory safe as they expect strong TV demand to cause a panel shortage in the second half,” Hsieh said.
Hsieh said he only saw weakness in 42-inch TV panels and some PC monitors.
Overall, “we are very optimistic about LCD demand this year. Demand for end products is growing fast,” he said.
Slowing demand in China this quarter would not undermine recovery in the US and Europe, Hsieh said.
This year, global shipments of LCD TVs are expected to grow 24 percent to 180.7 million units on replacement demand in emerging markets, compared with 145.7 million units last year.
As the global economy stabilizes and demand for electronics rises, Hsieh said there “will be a low risk of seeing prices collapsing this quarter or in the second half of the year, as some have speculated.”
Frank Ko (柯富仁), an associate vice president at AU Optronics Corp’s (友達光電) TV display business unit, said: “Chinese TV makers are adjusting their inventory [downward], but demand is still strong in China. Prices are stabilizing in the second quarter.”
Chinese flat-panel maker BOE Technology Group (京東方) said it was unable to satisfy customer demand.
“Demand exceeds what we can supply by between 30 percent and 40 percent. We are seeing a shortage in IT and TV panels,” David Li (李學政) told reporters on the sidelines of the annual display forum organized by DisplaySearch in Taipei.
Yesterday marked BOE’s debut at the forum.
To expand its market share, BOE is building a new 8.5-generation and a sixth-generation plant in Beijing and Hefei, Anhui Province, for US$4 billion and US$2.5 billion respectively.
BOE aims to increase its global market share to 5 percent next year and 7 percent in 2012 after the 8.5G plant is brought on line in the third quarter of next year and the 6G plant in the final quarter of this year, Li said.
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