Joseph O'Halloran ©RapidTVNews | 17-08-2011
Most LCD TV set makers are reducing panel demand forecasts for the remainder of 2011 in order to trim costs and maintain low inventory levels according to new data from specialist DisplaySearch.
In its latest Quarterly Large-Area TFT LCD Shipment Report, the screen technology analyst predicts that panel makers are targeting a modest 7% growth in shipments for Q3 2011 as downstream manufacturers and brands prepare for the holiday season. However, it also expects flat growth in the key Q4 period.
The analyst calculated that shipments of large-area TFT LCD panels increased to 180.8 million units in Q2 2011, an 11% rise in sequential quarters and a 6% increase year on year. Revenues reached $19.3 billion, another 11% Q/Q increase, but a 16% decline Y/Y. Moreover, despite the 7% overall Q/Q growth, the TV panel segment showed shipments suffering 4% Y/Y decline. Worse still, they also showed that even though revenues grew by 8^5 on a quarterly basis they fell 20% Y/Y.
DisplaySearch believes that a decrease in panel prices at the end of July and beginning of August has caused panel makers to become concerned about conditions for the second half of 2011. It notes that panel prices are becoming more negotiable due to the concern over weakening demand, and falling prices will likely encourage panel makers to cut capacity utilisation. This is regarded as abnormal for second half shipment targets, which typically aim for strong growth.
“The TFT LCD industry has been in oversupply for more than a year, and Q1’11 was at the bottom of the cycle. Prices rebounded slightly in Q2, and both shipments and revenues increased. However, this was just a short-term rebound, as stagnant economic conditions and low consumer confidence continue to exert a drag on demand, especially for IT products and TVs,” commented David Hsieh, Vice President, Greater China Market, DisplaySearch. “Panel makers did not achieve their goal of growing Q2’11 shipments 18% Q/Q, and slow demand is eroding panel prices in Q3.”