IHS DisplaySearch has also released its panel pricing data for April/May, with some parallels. The firm writes that pressure on TV panel prices continues, particularly for 32″, 48″, 49″, 55″ and UltraHD models. 40″, 42″ and 43″ sizes are exceptions; prices for these units generally remains flat due to high demand and limited supply sources. Although TV makers continue to request greater price reductions, there is no indication that panel makers are willing to make concessions.
Aside from a few leading brands, most TV makers are being cautious about production, and have cut panel demand by 5% QoQ, on average, in Q2. These include the top six Chinese brands. Some panel vendors are planning to offer Chinese TV makers price protection on certain sizes, says DisplaySearch.
Demand for 32″ panels among several Chinese TV brands is expected to fall 20% – 25% QoQ. Due to increasing panel price hikes (for almost a year), these brands are unable to maintain an aggressive pricing strategy.
Data was also released for monitor and notebook panels.
Inventory adjustments and the strong dollar meant that some brands increased monitor set prices. These brands are waiting for a revised market forecast. Panel makers had difficulty promoting and selling monitor panels in April. Price pressures became heavier overall; prices fell by more than $1, and new concession deals were signed.
DisplaySearch expects monitor panel purchases to rise as some brands begin to refill, preparing for a potential TV demand rise in Q3. During May, panel prices are predicted to continue downwards, but demand will return later in the month and in June, to avoid constraints during Q3.
Weak IT demand in Q1 led to notebook vendors successfully driving down panel costs. IT demand is flat in Q2, but panel inventories are high and it is taking time to work through them. There has been pressure on notebook PC panel makers to lower prices; some have begun to shift capacity to automotive and smartphone applications.
Prices for notebook PC panels cannot be sustained this month, due to the capacity transition. IHS expects prices to fall, but notes that they may stabilise once the capacity conversion is over.
Analyst Comment
A 6% oversupply is still in the reasonable range – we used to get dramatic shifts some years ago when we got to 10%. In fact, less than 5% oversupply can feel a bit like shortage as set makers may not be able to get the panels they want from the suppliers they prefer at the time they need them. (BR)
