Price Overview, 1H of Dec, 2007

뉴스 제공

2007-12-06 08:27

Taiwan--(뉴스와이어)--Price Overview, 1H of Dec, 2007

Abstract

Since Apr07, panel prices have continued to rise for nearly 8 months, prompting an earlier-than-expected inventory pull in from downstream clients. This subsequently created a panel shortage in 2Q07 and 3Q07. Looking into 2008, with only CMO’s new G6 coming online, the market expects the panel supply growth to be limited. Thus, despite the market already entering into the slow season, the panel price decline is expected to be more moderate when compared to the 30% drop witnessed between the end of 2006 to 1Q07. Coupled by the persisting strong TV panel demand, chances for a sharp panel price decline will not be too high. According to WitsView’s survey, for 4Q07, IT panel prices will decline by merely 3%~5%, while in the TV segment, prices will remain relatively steady.

In the Monitor and NB segment, as downstream clients have already sufficiently prepared their panel inventory for the year-end Christmas season, a decrease in orders started to occur since November. Some Tier 1 brand vendors had even requested panel makers to cut their November panel price quotes. Amid concerns of a possible panel supply shortage in 2008, panel makers have kept the prices flat for November. However, the price pressure for December will be more severe. In addition to a more notable weak seasonality, both the buyers and sellers will make sure their respective inventory levels don’t run too high during the year’s end. From WitsView’s own observation, the panel price for 1HDec is still being negotiated. The actual price changes will not be clearer until the end of December. Nevertheless, based on the current panel price levels, despite weaker demand and looming price corrections, panel makers are still enjoying relatively high profit margins. After all, more than 2/3 of 4Q07 has passed. With prices currently at a high point, a 2%~ 4% price drop is projected when the quarter ends.

In the TV panel segment, due to strong sales in the end market, the panel demand remains strong, allowing prices to stay at current levels. However, after China’s National Day holidays, an increase in the inventory levels of the country’s retailers appear to be occurring. Meanwhile, with the IT panel capacity dropping, there is now more room for additional TV panel production. By further taking into account the ongoing ramp up and yield rate improvements of the G7.5 and G8 lines, the TV panel supply is increasing more rapidly now. Once the Christmas sales draw to a close, the demand and supply is expected to return to a more balanced state.

Content

Monitor Panel Price Update

In light of the weak seasonality, an evident drop in the IT panel demand is seen. Based on WitsView’s survey, prices are expected to drop by an average of 1%~3%. As demand from the commercial market drops, the relatively high-priced standard 17” and 19” (4:3) panel will drop by USD 3 to USD 135 and USD 155, respectively. Meanwhile, demand for MFM models is still strong. With more 19W models being equipped with the function, it is attracting many consumers in choosing the 19W over the 17”, as the price levels have become relatively the same. Thus, the 19W will drop by a mere USD 1 to USD 137, increasing the price gap with the 17” to USD 2. The gap is expected to further grow during the slow season. Due to weaker demand for the 20.1W, price will decline by an average of USD 3 to USD 148, respectively. Finally, in the 20.1W segment, the particular panel size is mainly manufactured at the G6 line. Thus, prices of the 20.1W will be largely decided by how the market develops.

TV Panel Price Update

Given the strong Black Friday sales and anticipation towards the Christmas sales season, the TV panel demand remains strong, especially for the 32W and below sizes. According to WitsView’s survey, due to the capacity sharing with the IT panels, the supply of the 32W is still tight. However, with the Monitor demand dropping, and the fact that the G7, G7.5 and G8 are now all producing the 32W, it should help ease the current tight supply of the 32W. Prices are thus expected to stay flat in 1HDec. With demand still strong for the 26(TN) TV panel, the limited supply from the G5 and G6 lines will drive up prices by USD 5 to USD 235. The low price average will increase from USD 225 to USD 230. In the 40” class, according to WitsView’s cost analysis, when producing a 42W WXGA panel at the G7.5 line, the fully loaded cost has dropped from USD 543 in 3Q07 to USD 530 in 4Q07. Meanwhile, the panel price has slightly dropped from USD 548 in 3Q07 to 4Q07 in USD 543. It can thus be seen that the 42W, which has been a money-losing segment for a long time has finally become a money-making size. Underpinned by the persisting market demand, prices will stay flat in 1HDec. However, amid improving yield rates and growing production capacity of the G7 and above, to further boost the market share, relative price adjustments will be made during the slow season. Separately, due to the ramp up of S-LCD’s G8 line, production of the 50” class is increasingly substantially. Prices are expected to range between USD 1200~1300.

Notebook Panel Price Update

As the Christmas sales season draws closer, brand clients have already built up their inventory levels. Thus, the demand for additional NB panels has grown weaker, thereby easing the inventory pull-in pressure on brand vendors. In addition, with the market approaching the year’s end, the price drop in the corporate market is faster than in the consumer market. Thus, the 14.1W and below sizes will drop by USD 2~3. More specifically, the 14.1W will decline respectively to USD 104. However, the 12.1W will be cut by as much as USD 5 for certain brand clients. This is mainly attributed to the fact that some low-cost NB end models employ older version panels that are heavier, rendering the price to be lower than the standard types.

Conclusion

As projected by WitsView, since November, the market demand has started to weaken in the wake of the arriving slow season. Coupled by the sufficient inventory of downstream clients for the year-end Christmas season, the market demand for Monitors and NBs has evidently dropped. However, amid strong sales of TV end products, and the production of the 32W and 26W being respectively squeezed by IT panels in the G6 and G5, TV panel prices are still relatively strong. However, with the production of IT panels dropping, there will be more room for additional TV panel manufacturing. After 1HDec, the TV panel demand is expected to begin weakening, as well. Despite the probable demand from the Chinese Lunar New Year in 2008, forthcoming price corrections are likely to occur, albeit limited. According to WitsView’s forecast, compared to 1Q07, where the average TV panel price was down by 8%~11%, it will be roughly 3%~5% in 1Q08. For Monitor panels, they will shrink from 10%~15% in 1Q07 to 8%~10% in 1Q08. For NB panels, the drop in 1Q08 will be relatively the same as in 1Q07, roughly 6%~9%. However, in the beginning of 2008, as the NB panel price is lower than in 1Q07, the future rate of decline should be smaller.

Although 1Q08 will still be affected by the traditional slow season, many market observers believe a shortage will occur in the TFT LCD market for next year. Thus, if an earlier-than-expected inventory pull-in occurs in 1Q08, it will offset the market oversupply momentum. For 2Q08~3Q08, the market supply is expected to turn tighter. In terms or area, WitsView projects the aggregate panel demand growth to reach 29.8% in 2008. TVs will experience the biggest growth---34%, while NBs and Monitors will respectively reach 20% and 8.5%.

웹사이트: http://www.witsview.com