Re-analysis: Demand for LCD Panels ‘Weak’

December 10, 2008
The effects of the current economic downturn are being felt worldwide to such a dramatic degree that at least one industry analyst firm is reconfiguring its projections from only a month ago.

According to analyst John F. Jacobs of DisplaySearch, panel makers continue to reduce fab (plant) loading, along with “rumors of potential short term (1-3 months) fab closures circulating in the industry. The few capacity expansion plans that were not already pushed out previously have since been delayed.”

Jacobs said in an article released by DisplaySearch this week that the demand side is also showing “substantial weakness” in the key area of LCD for both HD television sets and desktop computer monitors. (Together the segments account for more than 70 percent of total “large area” screen production.)

DisplaySearch this month has “revisited” its LCD TV and monitor forecasts for the last quarter of the year and early 2009, and said it will republish its findings soon—but Jacobs said “the outlook is not positive.” In the past, he said, “cutting panel price, which allowed reductions in set price, spurred demand, reversing down cycles. However, this time there is no longer a CRT replacement market for monitors, and a shift in LCD TV demand to larger and larger sizes has failed to materialize.”

Surplus of LCD units grew from the third to the fourth quarter of 2008, Jacobs notes, and likely will continue to increase in early 2009 (despite the holiday season).

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