What They Say
DSCC commented in its blog on the all time lows that are now being seen in LCD TV panels and forecast that the prices will continue to decline, with an expectation of an average drop of 15.7% in Q3. The firm is not sure when they will ‘bottom out’ in a ‘perfect storm’ of conditions. LCD makers have been cutting utilisation since June, but there is no sign that prices can increase soon. Utilisation reached 70% in July.
Inventory continues to build for panel makers and prices for all screen sizes below 75” have now fallen below cash costs for most industry players and well below for commodity producers. The price premium for 65″ on an area basis was eliminated in Q2 and in Q3 even the price of 75” panels is falling rapidly, DSCC said, falling below cash cost for the first time.
What We Think
The crystal cycle will, no doubt, eventually lead to a recover, but it’s really not clear when this might be. Demand needs to be boosted (and there are few signs of this at the moment) or supply has to be cut a lot – which would mean a panel maker dropping out with nobody interested in taking over the capacity. (BR)
The comparison of LCD panel prices v cash costs shows the deep dip in the Crystal Cycle
