IHS DisplaySearch has released panel data for June, when prices continued to fall.
Market demand for notebooks is still weak. Consumers are deferring purchases, preferring to wait for Windows 10 and Intel’s Skylake chips. Notebook vendors recently negotiated concessions with component makers, to lower set prices or offer a commission for channel sales. New models are being prepared, to catch consumers’ demand in Q3.
Panel orders for notebooks will remain flat in Q3. A few panel makers have already decided to lower utilisation, or shift capacity to other applications such as monitors. This move will help to prevent panel prices from dropping sharply. However, prices of all sizes are still expected to fall more than $1 this month.
Prices for monitor panels have dropped over $1, as there is still excess supply and production is gradually rising. We are now entering the traditional ‘hot season’; however, monitor panel production is less profitable, as it is being squeezed by TV panels – which have higher premiums.
Responding to rising demand for UltraHD TV panels, monitor panel production is likely to become a lower priority for panel vendors. The pressure on wide 21.5″, 23.8″ and 27″ has been heavy in June, as makers need to work through their current capacity before transitioning it. Special deals on Q3 volumes are still under discussion.
UltraHD TV panel demand, from international brands, is still rising; however, most TV makers have reported slowing demand. Some makers cut panel demand in June, as well as their demand forecast for Q3, to better control inventories. They have also asked panel vendors for price concessions. These vendors are less likely to reduce prices on most TV panels in June, although may drop them slightly. The 32″ panel market is an exception; special deals have been negotiated.
Among those brands still demanding panels, IHS has seen a continued widening gap between panel purchasing quantities and set shipments, in the first half of the year. Based on these brands’ aggressive purchasing volumes and forecasts, it is assumed that they will need to weight seasonality heavily towards the second half of the year.
TV makers are facing a ‘very tough time’ with their finances. They are asking for market development funds (MDF) from panel suppliers, but negotiations do not currently seem to be in their favour.
