Inventory replenishment among system integrators and branded vendors is driving up shipments of large-sized LCD panels in February, resulting in a second consecutive month of price increases, according to iSuppli Corp.
Average panel pricing in February will rise by $2 to $3 for monitors, by $1 to $2 for notebooks and by $2 to $3 for televisions. If February pricing follows iSuppli’s forecasts, this will represent the second month in a row that all applications in the large-sized LCD panel market have increased in price.
In January, overall LCD panel pricing increased by 2 percent, also due to strong demand for inventory replenishment and tight panel supply. Television panel pricing rose by 0.3 percent for the month.
TV Panel Softness Ahead?
In the second quarter, iSuppli expects television panel pricing to remain flat or to show some softness.
On the demand side, this softness will be the result of slowing sales as North American brands finish their new-model launch preparations and China’s Labor Day holiday ends. On the supply side, LG Display’s 7.5-generation fab and Samsung LCD’s 7.1-generation facility will be fully depreciated by the second quarter. This will allow both companies to reduce pricing in an effort to expand market share and to increase profits.
Luckily, limited capacity increases for television panels in the second half of 2010 will help stabilize panel pricing and prevent further declines.
In the near term, television panel pricing is expected also to bear the fruits of the February price increases because of the Chinese Lunar New Year holiday and lower panel shipments. However, demand for television panels remains healthy from the Chinese and U.S. markets. With shipments expected to grow in the double digits in March, panel prices will rise slightly again for the month.
Read More, Strong Inventory Replenishment Demand Pushes Large-LCD Panel Market Back to Tight Supply >