LCD Panel Pricing in Balancing Act, IHS iSuppli Says

Effects from the Japan earthquake have resulted in an “equilibrium in overall pricing” of LCD panels during April and May, with prices for some applications rising and others dipping indicating a period of “general uncertainty,” according to research from IHS iSuppli. Average pricing for large-sized LCD panels slipped 0.5 percent in April, the smallest decrease during the last nine months, IHS said. The price in May is expected to drop by even less: 0.1 percent. Notebook panel prices are forecast to rise 0.2 percent in May after climbing 0.4 percent in April, while monitor panel prices will inch up sequentially by 0.14 percent. Average television panel prices, however, will fall 0.6 percent for the month, IHS said.

Consumer demand for LCD-based products including TVs, monitors and notebooks remained weak in Q1, IHS said, leading to higher inventories. At the same time, name brands are starting to stockpile products to serve as insurance against possible supply chain disruptions caused by the earthquake.

TV panel suppliers are expected to seek price increases in May, or to maintain current levels, as a result of Chinese manufacturers buying panels after the Labor Day holiday for inventory replenishment and exports, along with a rise in demand from other emerging markets, IHS said. Buyers, however, will “find it difficult to accept any price increases,” since demand for television panels in the U.S. and Europe “failed to recover in April” and because production has been impacted in Japan, it said.

On the supply side, “some amount” of TV panel production has been impacted due to production cuts at Panasonic’s Gen 6 fab and Sharp’s Gen 8 and 10 plants, IHS said. Many Taiwanese suppliers have cut their fab utilization due to weak panel demand as well, it said. Some Japanese fabs are planning to bring back production in June, while other panel suppliers will be ramping up Gen 8 fab capacity, it said.

As a result of weak demand, TV panel prices fell 0.9 percent in April, according to IHS. Price for the majority of television panel sizes declined by less than $5, with those 32 inches and larger showing price decreases in the $1-$2 range. For 32-inch 1080p panels, the pricing gap between products with CCFL and LED backlights is about $35-$40, it said.