Through to the end of April, panel makers are experiencing price declines of around 1% in most applications, IHS DisplaySearch data shows.
Due to the strong dollar, monitor makers are suffering losses in non-US markets. Channel inventories are being adjusted by brands, following a build-up after weak demand in Q1. Pressure is on some brands to lower inventories to produce a better quarterly finance result. Because of this, monitor demand is low in April. IHS expects panel prices to continue to trend downward for the rest of the month.
Larger notebook PC brands continue to adjust inventories in April; both panel and set inventories are slightly above normal, especially in Europe due to the weak euro. Set price increases are being considered by some brands to avoid losses from currency devaluations. IHS expects panel prices to continue downwards.
Price pressure is increasing on TV panels, particularly in the 32″ segment. Some makers are requesting greater reductions, but panel makers have shown no signs of willingness to make these concessions. Some TV brands continue to aim at maintaining aggressive panel procurement for strategic reasons – even though their annual set business plans have been lowered. The revision in plans is due to these brands’ higher presence in markets like Russia, Brazil and Western Europe, which have been risky due to currency depreciation.
Falling currency values have been the most critical swing factor for LCD TV panel shipment outlook and panel pricing in Q2. TV makers are under heavy pressure worldwide due to shrinking profit margins, and IHS has not ruled out a ‘sudden and significant’ correction in mid- to late Q2.
TV makers are increasingly concerned about the downward panel price trend and the risk of market demand adjustments.