LCD panel pricing rises slightly as companies boost purchases to mitigate risk from Japan disaster

Diposting oleh fawaid on Kamis, 30 Juni 2011

EL SEGUNDO, USA: Despite feeble end-market demand in June for televisions and other products using large-sized liquid crystal display (LCD) panels, a slight increase in overall LCD pricing is expected this month as companies rebuild their inventories to serve as insurance against supply disruptions related to the Japan disaster, according to new IHS iSuppli research.

For each of the three main applications of large-sized LCD panels—i.e., televisions, monitors and notebook computers—pricing in June is projected to rise by an average of 0.2 percent, the first time all three applications have experienced an increase in 14 months dating back to April 2010.

The figure presents the IHS iSuppli forecast of global month-to-month pricing changes for large-sized LCD panels, described as those 10.1 inches or larger in the diagonal dimension.Source: IHS iSuppli, USA.

“Consumer demand for the major products using LCD panels, like televisions and computers, remains weak, especially in the United States and Europe,” said Sweta Dash, senior director for liquid crystal displays at IHS.

“Despite this alarming sales situation, pricing is on the rise for all of the major LCD applications with panel buyers replenishing their stockpiles in order to build buffer inventory, in case of further supply disruptions spurred by the Japan disaster, and as panel suppliers reduced utilization rates to control production. This is driving up pricing for panels in all major applications.”

For June, all three applications for large-sized LCD panels are expected to post slight increases, rising 0.1 percent for desktop PC monitors, 0.2 percent for televisions and 0.5 percent for notebooks.

This contrasts with previous months when pricing increased in only one or two of the panel applications—while prices in other areas fell steeply, dragging down the overall average.

Japan concerns drive panel sales
Buyers still are purchasing panels to mitigate the risk of any shortages of components used to make LCD panels following the Japan quake disaster in March. Japan is a major source of production of components for use in LCD panel manufacturing.

Furthermore, buyers are increasing their LCD purchasing as they prepare for the upcoming summer and back-to-school seasons, generally periods of hot activity for the market.

Nonetheless, some major brands continue to report high channel inventory. This is preventing the price increases from rising higher in June and keeping them at moderate levels during the month.

Demand remains a concern
The primary concern at present for the LCD market remains the sluggish state of demand among consumers in the United States and Europe, with several branded vendors lowering their second-quarter sales targets.

The weak end-market demand remains a distressing sign for future panel pricing. Several panel suppliers had planned to return to their full factory utilization rate in June as they were still receiving stable-panel demand. However, several brand vendors have lowered their second-quarter sales targets.

In one sign of potential trouble, the panel inventory replenishment efforts in China could slow in July, prompting panel suppliers to cut utilization rates of their fabs in June. Panel demand from international brands in particular will be critical to support panel pricing in the second quarter of 2011 and in the third quarter of 2011.

Panels on hand
Total large-sized LCD panel inventory in June is anticipated to stay at approximately 30 days, following a 5 to 10 percent increase in demand during May.

Among individual panel applications, notebook panels will show a slight price increase in June as branded vendors start ramping up production plans to meet annual and semiannual financial reporting periods. Panels in tight supply include the 14.0 inch size, owing to an upside in demand from China and the rest of Asia. In comparison, demand continues to lag for the 15.6 inch because of slow demand from the US and European markets.

For television panels, inventory is being controlled successfully by panel suppliers. Television panel demand in June is expected to grow about 10 percent compared with May, in anticipation of the hot selling season to come. For international brands, any increase in panel pricing will have to be borne and accepted, especially for models based on the older backlighting technology of cold cathode fluorescent lamp (CCFL), the precursor to the newer light-emitting diode (LED) technology in more advanced panels today.

In monitors, price increases are expected to slow in June after having climbed 0.4 percent during each of the last three months. Pervasive weak demand continues to hobble the sector.

Source: IHS iSuppli, USA.

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