Prices for LCD panels used in TVs and computers are expected to fall at a faster pace in the first half of this month as TV and PC makers cut orders amid sagging demand in China and Europe, market researchers said.
The weak pricing, however, is expected to be brief, as demand tends to pick up in the third quarter when TV makers increase inventories prior to back-to-school season and holiday shopping sprees in the second half of the year, for which most manufacturers have set high sales targets, US-based DisplaySearch said in its biweekly report released on Saturday night.
“Slow demand in China and Europe remains a concern in June,” DisplaySearch said in a biweekly pricing report also released on Saturday.
“To drive more demand, aggressive strategic promotions have been used in the region. Overall, the market is entering its traditional slow season, and TV brands and OEMs intend to prioritize inventory management ... To meet high annual sales targets, TV vendors are expected to be restocking panels in the third quarter,” it said.
The mainstay 32-inch LCD panel is expected to come down by US$2, or about 1 percent, to US$203 per unit in the first two weeks of this month, from US$205 at the end of last month, the Austin, Texas-based research house said.
Reflecting recent slow demand, decline in panel prices “is accelerating this month after TV makers pared orders as demand slackens in Europe because of the deepening debt crisis as well as lukewarm inventory buildup demand in China,” Annabelle Hsu (徐美雯), a flat-panel analyst with International Data Corp, said last week.
“May was the turning point,” she said.
Panel makers had thought they would be able to keep prices stable last month after excessive inventories amassed by Chinese TV makers were reduced to a lower than normal level, but this took longer than panel suppliers expected, Hsu said.
Being more cautious than DisplaySearch, Hsu expected the price for 32-inch TV panels to decrease by US$3 per unit and prices for 40-inch or 42-inch TV panels to fall by US$5 per unit in the first two weeks of this month, from two weeks earlier.
The price for a 40-inch or 42-inch TV panel will slide even faster, by US$3 per unit, or almost 1 percent, to US$330 in the first half of this month from US$333 per unit quoted in the second half of last month, DisplaySearch said in its report.
Falls in price would be bigger for computer panels this month, DisplaySearch tallies showed.
“Uncertainty in the European market remains a concern. The currency depreciation in Europe has placed a financial burden on monitor brands that focus on this market,” DisplaySearch said.
Because of intense price competition, especially in Europe and China, monitor brands and OEMs would continue to ask for panel price concessions this month, DisplaySearch said.
Prices for mainstay 19-inch LCD monitor panels and 15.6-inch notebook computer panels are expected to fall by 2.43 percent or US$2 and 1.64 percent or US$1 respectively, to US$80 per unit and US$60 per unit, in the first two weeks of this month, DisplaySearch’s statistics showed.
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