LCD Panel Prices Continue Freefall

Fascinating stuff from iSuppli on the current LCD panel price freefall:

Despite Production Cuts, Large-Sized LCD Panel Prices Plunge
February 5, 2007

A
major slowdown in demand for large-sized TFT-LCDs in December for all
applications — televisions, monitors and notebooks — triggered a
faster-than-expected fall in panel prices for the month and for
January, according to iSuppli Corp. Price erosion is expected to
continue through the first quarter because of the seasonally slow
market conditions. However, monitor and notebook panel prices may
stabilize by the end of the second quarter, iSuppli predicts.
Television panel prices, on the other hand, will continue to decline
through the second quarter due to increased production from
newer-generation LCD fabs.

It’s a cause for concern that many panel suppliers reduced their
fab utilization rates to 80 to 85 percent in December through January,
down from 95 percent and higher in November, to prepare for the
traditionally slow season, “yet this failed to stop the steep fall in
panel prices that we have seen in December and early in the first
quarter,” said Sweta Dash, director of LCD and projection research at
iSuppli.

LCD monitor panel prices in January fell by 4 to 6 percent, notebook
panel prices declined to 2 to 4 percent and LCD-TV panel prices
decreased by 3 to 8 percent compared to December. However, one good
piece of news is that the rate of price erosion is expected to diminish
in February due to reduced supply. The reduced supply is the result of
February being a shorter month and holidays due to Chinese New Year,
according to Dash.

Turning down the televisions

Although LCD-TV demand continues to be strong due to Super Bowl
sales and the holiday season in Asia, most retailers and television
manufacturers are continuing to reduce post-Christmas inventories to
prepare for an expected slow first half of 2007. This is actually
making the oversupply situation worse in January, causing prices to
continue to plummet, according to iSuppli.

Slow seasonal sales and oversupply in the first quarter of 2007 will
push prices to less than the $300 level for 32-inch LCD TV panels in
March, which is below the manufacturing cost level, iSuppli believes.
Many suppliers are continuing to cut their utilization rates at fabs
that are producing these types of panels in order to stave off any
further rapid price declines.
Prices for 37-inch television panels are experiencing a stronger rate
of reduction than the 40/42-inch television panels. Suppliers are
cutting 37-inch pricing in a bid to boost demand. This may bring the
37-inch price closer to that of the 32-inch panels in the coming months.

Monitors falling too

Continued inventory control efforts by monitor suppliers reduced panel
demand and led to significant price reductions in January. Prices for
the 19-inch wide and 17-inch standard panels fell by 6 percent in
January compared to December, reaching an average price of $123 and
$113, respectively. Meanwhile, prices for 15.4-inch and 14-inch WXGA
notebook panels fell 3 percent and 4 percent in January, respectively,
compared to the previous month, reaching average prices of $97 and $94
in January.

While iSuppli expects mainstream monitor and notebook panel prices
to fall in the first quarter of 2007, pricing should stabilize by the
end of the second quarter. This is because panel suppliers appear to be
more cautious about capacity expansions and cutting utilization rates
to control inventories. Most buyers have very low inventories, so any
rise in demand may lead to increased panel purchases.

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  5. Gasoline Demand in Freefall

Comments

  1. mj says:

    this is what is “supposed” to happen. it will drive HD and vista and “convergence. yes it will hurt the commodity builders for a while but its good for us and will create more uber geeks.

  2. Wes says:

    Over the weekend I purchased the Westinghouse 4702 42″ LCD monitor for $899 from bestbuy. That price included a $100 discount for upgrading (w/ no contract) to TimeWarner’s HD service (~$7.00 more than the basic digital service). For the record the tv looks fantastic.

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