Sigmaintell of China said that the TV panel business will have a surplus of supply over demand of 4.5% which means quite a tight supply situation. The company said that US channel inventory of TVs was healthy at the end of Q2 and Chinese TV brands have also been increasing their inventory. Both BOE and CEC have been increasing the output from their new fabs, AUO is ramping up its new G8.5 but the increase in inventory means that there has not been much surplus. However, the firm is worried about the need to clear inventory in Q4 after peak sales have passed.
Chinese makers have shifted their focus from 32″ and are trying to promote 43″ and 55″ sizes. Supply and demand balance is different for each size range.
Global supply balance – TV panels by size. Source data:Sigmaintell. Image:Meko
The company points to potential global economic instability as a risk factor.
Other analysts have suggested that better demand from TVs in the US and related to World Cup promotions have helped the situation and expect prices to start to rise. Sigmaintell said that it expects prices to come under pressure in Q4 as the overall over-supply gets to around 7% to 8%.
Analyst Comment
This is the first year of the big boost in LCD capacity that will last for another couple of years, so it looks as though the over-supply will not be as bad as had been feared, but there is plenty of time still! (BR)
