Taiwanese LCD panel makers can expect to see their revenues slip by about 0.83 percent sequentially this quarter as demand for TVs from China loses steam after Beijing ended a subsidy program, a local market researcher said yesterday.
Such a seasonal decline is unusual, as China’s holiday shopping season in October and back-to-school demand for PCs usually boost demand.
Panel makers’ combined revenue is likely to drop to NT$250.31 billion (US$8.35 billion) this quarter, compared with NT$252.4 billion last quarter, the Industrial Economic Knowledge Center (IEK) forecast. The figure does not include revenue from LCD components such as color filters and glass substrates.
Revenue from PC and TV panels is expected to shrink by 2 percent to NT$187.25 billion this quarter from NT$191.07 billion last quarter, while revenue from panels used in portable devices is set to grow 3.08 percent to NT$59.16 billion from NT$57.39 billion, IEK forecast.
“Taiwanese LCD panel makers will feel the pinch of China ending its subsidy program, as they rely heavily on the Chinese market,” IEK said in the report.
Innolux Corp (群創光電), the nation’s top LCD panel maker, has the biggest exposure to the Chinese TV panel market among local firms, generating about 20 percent of its TV panel revenue from China.
Demand for PCs is also likely to be a cause for concern for many local companies.
“Some PC vendors are cautious about replacement demand triggered by an updated version of [Microsoft’s] Windows 8 operating system and Intel’s new Haswell processor,” IEK said.
The center also said that Chinese LCD panel manufacturers BOE Technology Group Co (京東方) and China Star Optoelectronics Technology Co (華星光電) are aggressively increasing their shipments of super-high-resolution TV panels, with the knock-on increase in inventory an issue of concern for the wider industry.
Meanwhile, market researcher WitsView said prices for TV panels slid by between 2 percent and 6.1 percent this month from last month on weak demand, with 42-inch panels suffering the biggest fall.
“Panel prices are under growing downward pressure as panel companies keep their factory utilization rates at a high level,” WitsView analyst Burrell Liu (劉陳宏) said yesterday.
The researcher cut its global LCD TV shipment forecast to about 203 million units this year from 205.1 million units, an annual contraction of 1.6 percent.