Driven by price increases since late 2009 and by lukewarm television sales during the Chinese New Year, pricing for Liquid Crystal Display (LCD) panels used for televisions is expected to be flat in March or even slightly decrease for some larger-sized products, according to iSuppli Corp.’s LCD PriceTrak Service.
Pricing of LCD-TV panels in 2009 reached such a high level that little room remains for further increases in 2010. Not helping matters is that during the Chinese New Year, sales were lower than manufacturers had expected. As a result, China’s panel demand is expected to slow in March, resulting in flat or slightly decreased pricing for television panels during the month.
The lower-than-expected television sell-through in China is the cause for the slowdown in TV panel demand. LCD-TV sales during the Chinese New Year were expected to be between 2 million and 3 million units, which would have resulted in a growth of 130 percent year-over year. However, the results were lower than what television brands had targeted, falling short by approximately 15 percent to 20 percent, partly because of vendors being too aggressive in building inventories.
Furthermore, high panel pricingimpacted brand vendors’ profitability. As a result, the inventory level is expected to be elevated for another two to three 300 weeks—which is projected to contribute 250 to the slowdown of television panel demand.
Inventory levels can still be television sales are expected to rise during the coming quarters. Furthermore, panel pricing could undergo a slight correction. However, the chance of a major television panel price crash is small because the inventory level remains healthy on the panel module supply side.
Meanwhile, the situation for the overall LCD panel market is better with March pricing expected to be flat or even slightly increase. Overall demand also is expected to be higher than what was seen in February or January of this year.
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