LCD panel glut exposes weak increase in Q3 TV demand
Joseph O'Halloran | 28-07-2013
By rights, sales of essential equipment for TV should currently be rising sharply, however research from IHShas revealed the opposite.
According to the rather self-explanatory report Oversupply to Continue Due to Weak Economy, the information and analytics provider found that suppliers of large-sized liquid-crystal (LCD) panels instead are encountering weak demand growth in the third quarter, exacerbating a glut already plaguing the market.
Measured in terms of square metres, IHS expects supply of large-sized LCD panels to exceed demand by 15.9% during the period July to September, 2013. This would represent three percentage points more than a previous forecast of a 13.2% oversupply. Even though this glut will decline compared with the second quarter of the year — the normal during the pre-holiday season — IHS regards it as running at elevated levels.
Looking at the third quarter, IHS predicts global large-sized LCD panel demand in terms of square meters is expected to rise by just 6% compared with Q2. A year earlier this growth ran at more than 10%.
“This is the time of the year when LCD panel-makers usually are ramping up production to meet holiday demand for televisions, notebook PCs, tablets and other consumer-oriented electronics,” explained Ricky Park, senior manager for large-area displays at IHS. “However, the display industry is confronting the prospect of weak sales growth and a lack of visibility into future demand trends. With a combination of flagging economic conditions and the end of a popular television incentive plan in China, large-sized LCD panel supply is expected to overshoot demand by a higher margin than previously predicted.”