The price of LCD panels used in televisions is expected to rebound gradually next quarter from near-cost level for most manufacturers after a prolonged downward spiral, US market researcher DisplaySearch said yesterday.
That would pave the way for solid recovery in the second quarter, when anticipated rising demand comes to support panel prices, David Hsieh (謝勤益), a vice president of DisplaySearch, told reporters on the sidelines of a TV supply chain forum held in Taipei.
Unlike the downcycle that occurred two years ago, the correction this time stemmed from excessive inventories rather than frozen demand caused by a global economic slump, Hsieh said.
“We are seeing signs of a pickup,” Hsieh said. “I believe you will hear more positive [industry] news later this year.”
South Korean firms have recently joined their Taiwanese peers in reducing equipment loading rates to ease oversupply in the industry, with it becoming a norm for LCD panel suppliers to adjust factory usage when demand dips, Hsieh said.
Samsung Electronics Co and LG Display Corp are expected to reduce their equipment loading rates to 92 percent and 80 percent this quarter from an average 94 percent and 90 percent last quarter, DisplaySearch’s report showed.
In Taiwan, factory usage rates at Chimei Innolux Corp (奇美電子) and AU Optronics Corp (友達光電) are expected to slide further to 65 percent and 83 percent this quarter from an average 73 percent and 86 percent last quarter, DisplaySearch forecast.
DisplaySearch’s forecast of factory usage for Chimei and AU Optronics contrasted with the Taiwanese companies’ recent predictions of a significant improvement in the fourth quarter. Nevertheless, the LCD industry will bottom out this quarter because of less supply and falling inventory, Hsieh said.
The benchmark price for 32-inch TV panels will start -bouncing back from just above cost — US$145 per unit — at the end of this quarter, Hsieh said, which would mean another 10 percent decline from US$162 per unit in the first half of this month.
Hsieh said he “is optimistic about LCD TV sales for next year.”
Global shipments of LCD TVs should see double-digit growth from an estimated 188 million units this year, driven primarily by Chinese demand, he said.
China may overtake North America as the world’s biggest TV market this year, DisplaySearch said. LCD TV shipments in China are expected to grow 18 percent to roughly 46 million units next year from 39 million units this year, the researcher projected.
Global LCD TV shipments could grow by as much as 25 percent year-on-year to 235 million units next year from 188 million units this year in the best-case scenario forecast by DisplaySearch.
“The growth will mean panel supply constraint next year,” Hsieh said.
Panel supply would exceed demand only by 7 percent, implying tight supply, he said.
However, in the worst-case scenario, a scant 14 percent annual expansion in LCD TV shipments to 215 million units would take place next year, the researcher forecast.
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