Price of LCD Stabilizes as LCD Businesses Shift Their Gear towards Large LCDs

Downward trend of price of LCD panels has visibly improved as industries can even expect small rebound during second quarter. However because oversupply is expected to continue overall, businesses are going to compete again each other to supply panels with 40-inch or above since these have high values.

According to display industry on the 29th, downward trend of price of LCD panels has slowed down based on level in second half of March.

According to data of price by a market research company called Witzview, average price of 55-inch UHD open-cell panel for TVs only decreased by 1.6% compared to first half of March at $190. 32-inch panel, which had the greatest range of decrease in price, maintained same price from first half of March at $52. Price of 40-inch UHD panel was also the same at $93.

Price of panels for monitors and laptops also only decreased by front-end of one digit or decimal place. Average price of 27-inch panel for monitors only decreased by 0.8% compared to first half of March at $95. As prices for 14-inch and 11-inch panels for laptops also only fell by 1.2%, downward trend of LCD prices was overall satisfactory.

Industries expect that prices of panels already hit trough and that they will start to recover in second quarter. Industries believe that although earthquake in Taiwan, reduction of yields from certain panel manufacturers and others did not have too much impact on markets, but they did help a little in increasing prices of panels. They are not interested in how much prices are going to drop in the future, but rather how much they are going to increase.

Although demands for TVs are decreasing globally and industries are at a difficult position to expect any increased demands from Olympics yet, it is a positive sign that possibilities of TV markets growing with Asia-Pacific region such as China, India, Indonesia and others at the center are still high. 

However markets did not recover completely yet from difficult situations. Because Chinese panel manufacturers are still increasing supply of 8th Generation panels, phenomena of oversupply will continue this year followed by last year.

Due to these factors, there will be a change in structure of competition as it changes from quantity to quality. As demands for TVs have decreased, panel manufacturers are trying to supply large panels that have high values and can minimize production cost per area.

Actually most of Chinese panel manufacturers decreased supply of 32-inch panels, which were their major products, starting from second half of last year and increased percentage of large productions with areas that are 40-inch or above. Although percentage of 32-inch panel products that were being produced by BOE and CSOT was 70%, they decided to decrease that percentage to 60% and re-strategized based on large panels such as 55-inch panels and others.

Industries are predicting that reduction of price this year will start from 8th Generation large panels. Range of decrease in price of panels with areas that are close to 50-inch is already becoming bigger than 30 to 40-inch panels.

“Price of panels with areas that are close to 50-inch in March has fallen by $5 compared to February and this is because LCD manufacturers are supplying more large and premium products.” said Director Kim Byung-joo of SNE Research.

“Because TV manufacturers are putting out new products this year and are expecting to recover demands for panels in second quarter and third quarters as Chinese Labor Day and Brazil Olympics are near, prices can rebound sometime during second quarter and performance can also be recovered until third quarter.” said Director Kim.

“Although 32-inch panels were initially expected to record its highest excess supply rate (125%) this year, it only recorded 105% in first quarter as many businesses are shifting their gear towards large panels.” said Director Jung Yun-sung of IHS Technology. “Because more businesses are supplying large panels that have high profit ratio compared to area, price of 65-inch panels will be significantly low in second half of this year.”

Staff Reporter Bae, Okjin | [email protected]