IHS: Large-Sized LCD Panels Log Surplus in 1H13
LCD TV set prices fall
August 26, 2013
EL SEGUNDO, CALIF. — A glut of large-sized liquid-crystal display panels
used in the television and information technology sectors arose at the end of
the first half this year as production consistently outpaced shipments,
according to market researcher IHS.
A total of 47.7 million square meters of LCD panels for use in televisions and
public information displays were produced globally during the first six months
of the year. Shipments amounted to 46.8 msqm. This meant that production for TV
panels exceeded shipments by 2 percent.
Meanwhile, 18.4 msqm of LCD panels were produced during the same period for the
monitors, notebook computers and tablets comprising the IT sector. Shipments
also came out lower at 18 msqm—similar to what occurred in the TV sector—so
that IT panel production exceeded shipments by 2.6 percent.
“The large-sized LCD panel market in the first half of 2013 suffered from slow
demand, primarily driven by an underperformance of sales in China, the world’s
biggest LCD TV market,” said Ricky Park, senior manager for large-area displays
at IHS. “In all, TV set makers proved unable to generate growth during the
first half despite a slew of holidays—including the Lunar New Year and Labor
Day—plus last-minute promos put up just before the end of the Chinese
government’s subsidy program in May to encourage new consumer purchases.”
HIS said the same lackluster demand was in evidence for panels in the IT
sector, where consumers and businesses alike showed little enthusiasm for
buying new monitors or laptop PCs. Instead, devices like smartphones and
tablets were the preferred items of purchase, selected for their appeal and
ease of use, Park said.
Given the slow demand, panel makers reduced utilization rates for their fabs to
79 percent during the first half—5 percent lower than the average recorded
during the second half of 2012. Still, the deliberate curtailment in fab
utilization was not enough to prevent an increase in accrued panel inventory.
Accumulated stockpiles for TV panels amounted to 8.7 msqm, up 12 percent from
the second half last year. For IT panels, the figure was 2.9 million msqm, an
increase of 19 percent.
The slow demand and high inventory of the first half resulted in a price drop
for panels during that time frame. The open-cell price of 32-inch
high-definition, 60 Hz TV panels fell by 7.5 percent, while that for IT panels
was down approximately 4 percent.
“The current excessive inventory levels portend badly for the rest of the
year,” said Alex Kang, senior analyst for large-area displays at IHS. “Production
is projected to exceed shipments again in the third quarter, and the second
half overall is forecast to be negatively affected by the inventory overhang
from the first half of the year.”