China’s major TV brands, led by TCL, purchased a record 6.73 million units of LCD TV panels last month, up 25 percent from October, primarily because of inventory buildup demand ahead of the Lunar New Year holidays, a Taipei-based market researcher said yesterday.
However, the big orders and high inventories raise the risk of a supply glut in the seasonally slack first quarter, TrendForce Corp (集邦科技) said in a report released yesterday.
Last month, Chinese TV makers shipped 5.23 million units, up 17 percent from October’s 4.46 million units, according to TrendForce.
The gap between TV shipments and panel purchase indicated that Chinese TV makers have bought more panels than they needed, which brought their inventory to 7.4 weeks on average, higher than the normal six-weeks, TrendForce said.
Inventories at some TV companies have ballooned to eight weeks, on the brink of excessive level, the researcher said.
“That poses a growing risk of oversupply next quarter,” TrendForce analyst Burrell Liu (劉陳宏) said in the report.
“The purchase is higher than our expectations,” he said. “The top six Chinese TV makers purchased too many TV panels in expectation of [short] supply.”
This quarter, TV panel supply is expected to surpass demand from Chinese TV brands by 21.1 percent, which is much higher than the heathly level of 5 percent, TrendForce said.
The supply of 50-inch LCD panels and 39-inch panels is expected to suffer the most this quarter as supply would exceed demand by 44 percent and 44.9 percent respectively, TrendForce said.
That would make the sell-through figures for LCD TVs during the New Year and Lunar New Year holiday a determining factor for the health of LCD industry, the firm said.
Panel supply is expected to exceed demand by 6.5 percent in the July to December period, TrendForce said.
Taiwan’s Innolux Corp (群創光電) and AU Optronics Corp (友達光電), along with LG Display Co of South Korea were the top three suppliers to China’s top six TV makers. Innolux held a 27.7 percent share, AU Optronics had19.5 percent and LG Display had 17.6 percent, according to TrendForce.
Chinese panel makers China Star Optoelectronics Technology Co (華星光電) and BOE Technology Group Co (京東方) took a 10.5 percent share and 9 percent share, respectively.
Shares of Innolux rallied 1.61 percent to NT$15.75, with 143 million shares changing hands, which made it the most active stock yesterday. AU Optronics shares surged 1.16 percent to NT$13.05. Both companies out-performed the TAIEX, which rose 0.19 percent.