Price increases for large LCD television panels decelerated this month as Chinese TV makers consider paring down orders due to a profitability squeeze and rising inventory during the slack season, market researcher IHS Markit said yesterday.
This month, prices for 49-inch and 55-inch TV panels rose just 1 percent — or US$2 — from last month to US$180 and US$215 per unit respectively, while smaller-sized panel prices remained flat after months-long increases, it said.
The price hikes are much slower than last month’s upward adjustment of 3 percent — or US$5 — for 49-inch panels, it said.
TV makers said that skyrocketing panel prices have eroded their bottom lines and it would be unacceptable to see a further price uptrend, the researcher said.
“Just recently, some leading Chinese TVs were forced to cut panel orders for the first quarter as TV set inventories rose,” IHS Markit said.
One Chinese TV maker said it would consider trimming panel orders if prices continued to rise, given a slight increase in its stockpile of some TV panels, including 40-inch, 43-inch, 49-inch, 50-inch and 55-inch models, it said.
It will be an uphill struggle for panel suppliers to keep raising prices during negotiations with some Chinese TV makers later this quarter, given that inventory has become an issue for some vendors from this month, IHS Markit said.
Overall, panel prices are expected to rise only slightly later this quarter, as demand for smaller sizes, such as 32-inch, 40-inch and 43-inch panels, start weakening, it said.
Meanwhile, global TV makers are reporting an overall balanced-to-tight panel supply for the current quarter, it said.
Sharp’s decision to stop supplying panels to Samsung Electronics Co and China’s Hisense Electric Co (海信), as well as near-future snap panel price hikes are becoming critical factors that will tilt the global supply-and-demand balance for panels this year, IHS Markit said.
The Industrial Economics and Knowledge Center (IEK, 產業經濟與趨勢研究中心) yesterday said that Sharp’s move could adversely impact the world’s LCD panel industry if its output turned out to be inventory, and its impact could be seen starting at the end of this quarter.
This year is expected to be stable and healthy for the LCD panel industry, IEK analyst James Lin (林澤民) told reporters.
“Demand for larger TVs is growing at a faster pace this year, which is a key factor causing short supply,” Lin said on the sidelines of an event arranged by the Hsinchu-based researcher.
“This year, TV screen sizes are expected to increase by 2 inches, faster than the annual growth of 1 inch over the past few years.”
That will help boost demand by about 10 percent this year, while LCD panel capacity is to grow at a slower pace of 6 to 8 percent year-on-year, Lin said.
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