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Press Release

TrendForce Reports Display Panel Prices Unaffected by Seasonality during Hot August

Friday , 08 / 21 / 2015 [ Analysts: Eric Chiou ]

The latest panel price report from WitsView, a division of TrendForce, says though the warm summer months are the traditional peak season for IT and TV products, display panel makers have been struggling to keep up their prices. IT panel demand remains weak in August, while the TV panel market has witnessed a larger price decline compared with the prior month because of concerns about end market sales and rising inventory level. Aggressive efforts from panel makers to retain their orders also have contributed the falling TV panel prices.

“Panel makers’ main goal right now is to maintain high shipment volume and protect market share,” said Eric Chiou, WitsView senior research director. “Since they are not planning to adjust their panel production in the short term and new capacities are setting up in China, the oversupply problem will worsen. Furthermore, the TV panel market has become increasingly conservative about TV set sales due to the reduced scales of upcoming promotional events and the slow pace of the global economic recovery. All these factors have created a buyer’s market with lots of noises in price dealing.”

WitsView’s survey of August TV panel prices shows the average quote price for the 32-inch has fallen close to the US$70 threshold even as panel makers are maintaining high capacity for this segment. The top two Chinese panel makers have cut prices for the 32-inch products in order to match their South Korean rivals, which have been using their cost advantage to undercut competitors. Prices of panels sized from 40 to 43 inches fell by US$3~5 in August. The entry of Chinese challengers into these segments has led to mounting pressure to reduce prices as well. The 48- and 49-inch panels, which are the main products rolling out of Gen 8.5 plants, have seen a price drop of US$6~8 resulting from falling stock up demand and rising inventory level. The downtrend in the 48- and 49-inch has in turn affected the prices of the 50-inch panels, which have been reduced by the corresponding amount in order to stay competitive. Larger TV panels, including those sized 55 and 65 inches, are seeing fiercer price war in August with the estimated decreases for Full HD and UHD products exceeding US$10.

In the monitor application, panel makers aim to achieve their shipment targets and reduce excess inventories for certain sizes in face of low stock up demand that is associated with the lackluster end market sales. Prices for monitor panels therefore has kept dropping in August with some sizes having greater rooms for negotiations. The average decline for the 23.8- and 27-inch panels has been around US$2, while smaller sizes such as the 19.5- and 18.5-inch are estimated to have fallen by US$1~1.5.

The notebook panel market has also been affected by the flat end market demand and lack of progress in inventory reduction for both panels and notebook computers. Consequently, panel makers are unable to continue to negotiate prices based on volume, a practice that was prevalent in the prior two quarters. Though quote prices for mainstream 15.6-inch and 14-inch notebook panels are near their cash costs, they are projected to have fallen by US$1~1.2 in August. Other sizes, including 11.6- and 17.3-inch segments, are estimated to have dropped by about $US1 in connection with falling demand. Oversupply and high inventory level have beaten down notebook panel prices for more than half a year. WitsView expects this downtrend will not moderate in the short term until these two problems have been resolved.

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