LCD panel prices fall to the bottom is still not optimistic about the short-term

The global panel giants have recently released Q4 and the full year financial reports in 2011, showing that the TFT-LCD (liquid crystal panel) business has suffered huge losses. Due to the economic downturn in Europe and the United States, the lower demand for complete machine in the downstream, and the continued decline in panel prices, the panel manufacturing industry at home and abroad was in a deep depression in 2011. Experts believe that panel prices have fallen to the bottom after a long-term decline, and 2012 may become a key year for the global LCD panel market reversal. The industry expects to see a bottoming rebound in panel prices, but the short-term outlook is still not optimistic. .

At present, the global panel industry has been deeply trapped in the “five low” era, that is, television prices, panel prices, inventory, capacity utilization and confidence, are the lowest period in history. In 2011, the development of LCD TVs encountered a rare market downturn. At present, LCD TV panel prices have already been lower than cash costs. Taking a 42-inch LED-backlit LCD TV panel as an example, the price was 335 US dollars in January 2011 and dropped to 267 US dollars in December, a drop of about 20%. The reasons are as follows: First, due to the economic environment impacts of the European debt crisis and the Japan earthquake, the market growth in developed regions such as Europe, North America, and Japan is limited, and the growth rate of emerging markets, especially in Mainland China, has declined again, leading to an overestimation of market demand. Second, the expansion of panel makers' production capacity caused serious oversupply, leading to continued decline in prices. In response to the downturn in the panel market, Japanese panel companies have begun to adjust their development strategies. In December 2011, Sony announced that its 50% stake in S-LCD Co., Ltd., a joint venture with Samsung, was sold to Samsung and its LCD panel business was withdrawn. Sharp recently announced that it will reduce the production capacity of large-size TV panels, and may use its production line in the main factory in Handan to manufacture more small and medium size panels. Panasonic plans to stop production of plasma panels at the third plant in Amagasaki by the end of March 2012 and sell an LCD panel plant in Chiba Prefecture.

It is worth noting that recently, iSuppli released an LCD price tracking report pointed out that large-size LCD panel prices stabilized in December 2011, ending the previous five consecutive months of decline. However, iSuppli believes that even if the panel market has stabilized, due to the uncertainty of the global economy, there is little room for suppliers to raise prices in the short term. TV panel prices are expected to remain stable in the first quarter of 2012. According to Gu Wenjun, a senior analyst at iSuppli China, the global LCD panel industry is abnormal in 2011, the off-season is not thin, and the peak season is not expected. In the first half of 2012, it is expected to remain bleak, but in the second half of the year there may be a turn for the better as the economic situation improves in the second half of the year. As market demand increases, the panel industry may rebound. Major panel makers also generally predict that the market will gradually improve in 2012. WitsView believes that although the steady price of the panel and the increase in production capacity will help improve the profitability, the downstream machine customers have already purchased some of the demand in the first quarter and February of this year in advance from November to December 2011. It is estimated that the panel demand in the first quarter will show a recession. If the panel maker's production capacity remains at the level of the fourth quarter of 2011 or further increases, the risk of panel inventory increase will impact the expectation that panel prices will bottom out. For the Chinese mainland market, Liu Shihong, WitsView research assistant, said that in 2012 China's LCD TV market was affected by the successive termination of subsidy programs such as home appliances to the countryside and trade-in programs, which directly affected the purchase of the Chinese New Year and Spring Festival. It is expected that brand manufacturers will adjust next. Shipment and control panel inventory are the main strategies and it is expected that the panel purchases in February will reach the lowest point in 2012. Originally, it is expected that the panel price will rebound after March. However, panel makers have increased the impact of the production rate, which has caused uncertainties for the price trend in the first half of the year.