A recent uptick in LCD TV panel prices is expected to carry into next month, as panel makers intend to raise prices by another 5 percent, market researcher NPD DisplaySearch said yesterday.
That is because panel makers want to take advantage of supply constraints amid restocking demand ahead of China’s Labor Day holiday on May 1 and the World Cup games in Brazil in June, the researcher said.
Mexico’s recent announcement of a four-year program to subsidize LCD TV purchases has also added pressure to an already tight market for panels, said David Hsieh (謝勤益), a vice president at NPD DisplaySearch.
The Mexican government plans to subsidize the purchase of 7 million TV sets.
Taiwan’s Innolux Corp (群創光電) and AU Optronics Corp (友達光電) — major suppliers of 23-inch and 24-inch LCD TV panels — are expected to be the biggest beneficiaries of the program, Hsieh said.
“It is very clear that a short supply of 32-inch and 42-inch [panels] will extend into the second quarter. That will lead panel prices to rise further in the next one month, or two, before taking a break during the slow season in June and July,” Hsieh said.
Panel makers are planning to raise the price of mainstream 32-inch TV panels to US$80 per unit, from US$76 per unit, to improve profitability, Hsieh said.
That would represent an increase of 5.26 percent, after prices snapped 10 straight months of declines last month.
“Demand from Central and South America, Brazil in particular, plays a bigger role in the recent tight supply of 32-inch and 42-inch TV panels,” Hsieh said.
The two size models make up more than 80 percent of Brazil’s flat-panel TV market, he said.
This year will be a “balanced year,” he added.
Market demand is expected to grow 7 percent annually this year mainly driven by demand for larger-screen TVs, NPD DisplaySearch forecast.
That would far outpace the forecast 4 percent annual expansion in global panel capacity, it said.
NPD DisplaySearch expects supply constraints and reduced factory depreciation expenses to help first-tier panel makers’ margins return to positive territory. It forecast a margin of 2.6 percent for next quarter and 5.1 percent in the final quarter of this year for PC and TV panels.
That compares with margins of minus-0.6 percent in the last quarter and an estimated minus-0.4 percent this quarter.
The market researcher forecast that the penetration rate of ultra-high-definition, or 4K2K, TVs will rise to about 18 percent this year. Shipments of 4K2K TVs in China are expected to increase to 10 million units, while overall LCD TV shipments would be 55 million units, the researcher projected.
To grab the business opportunity, South Korean panel makers Samsung Electronics Co and LG Display Co develop and supply affordable 4K2K TV panels to Chinese TV brands such as Konka Group Co (康佳), taking on Taiwanese panel suppliers, the researcher said.
The new 4K2K TV panels from Samsung and LG Display would be 10 percent lower in price compared with those from Taiwanese makers, the researcher said.
Innolux, which mainly ships 4K2K TV panels to China, could suffer the brunt of the competition, if the new affordable 4K2K panels are well received, it said.
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