We have just entered the fourth quarter, and Black Friday is in sight. Predictions from DisplaySearch are for another round of astounding price cuts for Black Friday and the looming holiday season. DisplaySearch is predicting LCD-TV prices will be 15 to 20% less than last year (averaged across all sizes), and PDP-TV prices will be 20 to 25% less. The price of a 42-inch FHD set could fall to below $1000 from $1400 last year.
Senior Analyst and Editor
Even with U.S. and European credit markets in melt-down (or perhaps we should say lock-up), these prices could fuel a reasonably healthy holiday season as far as units are concerned.
But the low prices on these TV sets have been fueled by very low panel prices. Demand has been up in 3Q, and will be up more in October, but the growth is not as much as hoped for early in the year, and those prices have kept profits modest. The prices of a broad range of panels reported on by DisplaySearch’s PriceWise service did not budge from the first half of September to the second half, primarily because they are already so low they can’t go down any further. (The only exception is 32-inch WXGA LCD-TV panels, which dropped $5 to a typical price of $255.)
On the IT side, a mature monitor market is suffering from the popularity of notebook PCs and the relatively small notebook panels don’t account for as much glass as panel makers would like us to consume. Orders for monitor panels will be increasing only slowly in October, Max Wang and Rodney Chan reported earlier today in Digitimes. Wang and Chan cited sources who believe "the panel industry will lapse into a lengthy low period before a possible rebound in demand emerges in the third quarter of 2009."
Now, panel makers are less than a month away from entering their traditionally slow season. Shipments can be expected to remain low from November to next February, at least, and plant utilization will therefore remain on the low side. First-tier panel makers are expected to see losses in 4Q’08 and 1Q’09, reported Rebecca Kuo and Joseph Tsai in Digitimes today, and some second-tier makers may even have been touched by red ink in 3Q.
We’re in for a bumpy couple of quarters. Fasten your seatbelts.