Weak demand in the LCD TV market has been putting great pressure on panel makers. Sales of LCD TVs have not increased as expected, causing the inventory of TV panels to grow, even if the third quarter…
Weak demand in the LCD TV market has been putting great pressure on panel makers. Sales of LCD TVs have not increased as expected, causing the inventory of TV panels to grow, even if the third quarter is traditionally the high season for LCD displays. Panel makers are, according to industry sources, hoping that by reducing production during the high season, coupled with growth in consumption during Christmas holidays in the fourth quarter, effective demand can be brought back. Demand of panels for monitors and notebooks has been flat, while shipments of TV panels have been not as good as expected. European and US economies are continuing to struggle in their recoveries, thus causing the consumption of TVs to be weak, added industry sources. The price of TVs has been falling rapidly with gross margins getting smaller, said industry sources, adding that the average selling price of 32-inch LCD TV panels has reached USD 150/unit and USD 230/unit for 42-inch panels. Furthermore, the penetration of LCD TVs in developed economies has been high, and, therefore, the market has been focusing on demand from newly-developed economies. These economies, however, have higher sensitivity to prices, thus limiting the price increases of TV panels. Many firms have been decreasing capacity due to the increase in inventory of TV panels. Panel makers hope the return of effective demand in the fourth quarter during the Christmas shopping season will facilitate the panel price to return to reasonable levels.