Prices for TV panels this month surged by as much as 18 percent as constant supply constraints deepened due to strong demand for inventory replenishment ahead of upcoming promotions for the holiday shopping season, IHS Technology said.
That bodes well for flat-panel manufacturers, as IHS expects the price hikes to help them emerge from poor financial results in the first half of this year, during which sluggish demand and oversupply made panels unprofitable.
Due to an industrial slump, Taiwan’s two largest LCD panel makers, Innolux Corp (群創) and AU Optronics Corp (友達光電), last quarter reported a third straight quarterly loss, bringing their losses over the past three quarters to NT$18.78 billion and NT$14.23 billion (US$590.2 million and US$447.2 million) respectively.
Supply became tight last quarter, which has caused a mild price hike for mainstream panels, such as 32-inch TV panels, IHS said on Saturday.
The uptrend carried into this quarter and has become even more significant this month, as TV vendors are boosting orders in preparation for the end-of-year shopping season, IHS said.
“Stronger-than-expected demand from leading global TV makers and others are giving panel makers the confidence to increase prices significantly this month, about US$10 [per unit] on 32-inch, 40-inch and 43-inch [TV panels],” IHS said.
The price for a standard 32-inch TV panel is now US$70 per unit, US$10 more than last month, according to IHS’ pricing information.
The price hikes have been led by Chinese flat-panel makers, as they are under heavy financial pressure and are eager to turn around their businesses, the research house said.
“This is far higher than expected and has caused concern throughout the supply chain, because TV makers might soon report losses,” IHS said.
Growth momentum is to extend into the current quarter, IHS said, but added that it sees uncertainty next quarter due to bubble demand included in its demand forecast.
The price increases will also spread to flat panels used in monitors and notebook computers, as supply this month has become increasingly tight due to improving demand and less capacity, because panel makers tend to allocate more capacity for higher-margin TV panels and industrial and automotive displays, IHS said.
Prices for monitor panels have risen by as much as 5 percent this month, while panels for notebook computers climbed by as much as 4 percent monthly, IHS’ price data showed.
“Panel makers this month have increased notebook capacity, because some PC brands received volume deals for the third and the fourth quarters,” IHS said.
Shares of Innolux closed down 0.43 percent to NT$11.6 after retreating from a gain of 1.72 percent in early morning trading.
AU Optronics shares were unchanged at NT$12.7.
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