According to the latest survey by WitsView, large-sized panel shipment posted a 2% MoM increase to 51.79 million units in August. Downstream vendors restocked early in preparation, leading to the record high shipment in large-sized panels in 2Q10. However, since the end-market demand was worse than expected, the rising inventory among downstream vendors become the top priority to clear away. Accordingly, entering the traditional peak season, panel shipments were squeezed and did not grow substantially in 3Q10.

 

Of five individual applications, thanks to the continued growth in Apple’s iPad shipments, shipments of tablet PC panels posted a significant increase by 57.9% MoM to 1.9 million units. The large demand at year-end peak season as well as the further decline in TV panel prices stimulated downstream clients to continuously restock LCD TV panels whose shipment added by 4.3% MoM to 18.03 million units. On the other hand, due to the high inventory level among downstream clients, IT panel shipment momentum, including monitor panels and ≧12.1 notebook panels, dropped tremendously. Monitor panel shipments were down by 4.6% to 15.27 million units while ≧12.1 notebook panel shipments rose moderately by 0.5% to 13.65 million units. Yet, the shipments of <12.1 netbook panels increased by 5.7% to 2.95 million units.

 

WitsView pointed out that under the build-up of inventory in the supply chain, panel prices may continue the downtrend at the current stage even though panel makers reduced glass input to lower their inventory level. WitsView further indicated that in order to achieve the annual shipment target, downstream clients will have to intensify the sales promotions for the upcoming hot season which will help their inventory clearance. In addition, once the IT panel prices fall below the cash cost, panel makers may turn conservative toward shipments under the pressure of loss. As a result, panel price decline may become softer which will possibly spur the panel demand. On the other hand, the difference of cost structures remained between Korea makers and Taiwan makers. Because of the cost advantage, it is noted that Korea makers may become more aggressive in panel shipments to fight for the market share and thereby enlarge the gap with Taiwan makers. Consequently, the time for reaching the equilibrium between supply and demand may be postponed as well.