TV LCD prices rise despite downturn

Average pricing for large-sized LCD panels is increasing at a stronger-than-expected rate in May due to a rebound in notebook PC demand and surprisingly robust television sales, according to iSuppli.

“While desktop PC monitor panel prices experienced a recovery in February, notebook panel prices continued to decrease throughout the first quarter due to weak demand,” said Sweta Dash, senior director for LCD research at iSuppli. “However, by May, virtually all large-sized panels – those with a diagonal dimension of 10 inches or more – experienced price increases compared to April, including notebook PCs and LCD TVs less than or equal to 37 inches in size. Even the 40/42in television panel prices started to stabilise after months of price reductions.”

Pricing in May is set to increase by $3 to $7 for monitor panels, by $2 to $6 for notebook panels, and by $5 to $8 for 26- and 32-inch television panels.

This trend is expected to continue in June and July with the prices of most panels tracked by iSuppli continuing to increase. Prices will remain on the rise in the third quarter during the holiday build season. In anticipation of these developments, suppliers have reduced their shipments by drastically cutting capacity at their fabs, making panel supply tight and helping to drive up prices as a result.

“China continues to be the key growth region, thanks to the government’s rural subsidy program and the upcoming Golden Week holiday,” Dash said. “Demand from the US market also is intact.”

Among panel suppliers, inventory is reportedly low at about two weeks—the same as it is for panel buyers. Many branded vendors and system integrators are suffering panel shortages for some sizes, although they are seeing improvement from the April level.

With most TV, monitor and notebook panel pricing hovering at the cash-cost level, panel suppliers are trying hard to increase prices in order to make a profit. As a result, pricing for the 26-, 32- and 37in TV panels as well as monitor and notebooks panels showed higher-than-expected increases in May.

The analyst firm has reported that, even amid the current economic downturn, consumers are continuing to purchase flat-panel televisions. However, with disposable incomes having been squeezed, US consumers are gravitating to smaller-sized sets. Because of this, sets sized 32-inches and smaller went into short supply starting in April, contributing to a rise in panel prices.

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