LCD panel prices drop after end of Chinese subsidy

By Lisa Wang  /  Staff reporter

Mon, Jul 22, 2013 - Page 13

The prices of LCD panels used in slim-screen TVs dropped again in the second half of this month as oversupply worsened after China’s removal of a TV purchase subsidy program stalled demand, a report by market researcher NPD DisplaySearch’s shows.

Flat panel producers only scaled down factory loading rates this month, the researcher said.

Beijing put an end to a subsidy program for TV purchases on May 31 and unexpectedly did not roll out a new subsidy program.

“Excess panel supply remains an issue for TV makers,” the US research house said in the report released on Saturday.

Taking advantage of excessive supply, TV makers would continue to ask for “aggressive” price reductions to build inventory for seasonal promotions later this year, the researcher said.

The price for a half-finished mainstream 32-inch TV panel dropped 2 percent to US$95 per unit in the second half of this month, from US$97 per unit two weeks ago, NPD DisplaySearch’s statistics showed. The price for 40-inch and 42-inch TV panels also fell 2 percent to US$257 per unit during the same period of time, according to the statistics.

The price figures released by WitsView, a Taipei-based LCD industry research team of TrendForce Corp (集邦科技), on Friday showed more drastic price reductions.

The prices for LCD TV panels slid between 1 percent and 3.2 percent in the second half of this month from the first half, with the mainstream 32-inch panels suffering the brunt, WitsView said.

TV manufacturers sidestepped buying more TV panels amid speculation about deep price decline in flat panels, which triggered a deeper-than-expected price drop this month, WitsView said.

To cope with the downward spiral of flat panel prices, flat panel producers are expected to lower their factory utilization by between 10 percent and 20 percent through the next few quarters to the first quarter of next year, WitsView said. WitsView expected demand to come back next month as TV brands boost panel inventory for October’s shopping spree in China and Black Friday shopping in the US.

Citigroup analyst Arthur Lai (賴昱璋) last week downgraded the nation’s two biggest LCD panel producers, Innolux Corp (群創光電) and AU Optronics Corp (友達光電), to “sell” from “buy,” saying weak TV demand from China, the world’s biggest LCD TV market, would cause inventory correction in the final quarter of this year.