China Electronics Information Industry Network 11th DisplaySearch recently released a research report pointed out that due to the market demand is not clear in the third quarter of 2011, large-size TFT LCD panel prices stopped rising in mid-June. As market demand, especially demand in the TV market, has decreased, panel suppliers have actively adjusted to prevent large fluctuations in panel prices. The panel maker originally planned to start full capacity in the third quarter, bringing the average utilization rate to 90%. However, according to the MarketWise-LCD Industry Dynamics report updated by DisplaySearch in June, the actual capacity utilization rate of TFT LCD panels will remain at 85% from June to September.
The average capacity utilization rate of large-size TFT LCD panels decreased in the first quarter of 2011, and the production capacity in April was 79%. In the second quarter, market demand surged, and panel makers increased capacity utilization rate, which will reach 85% in June. The panel maker originally planned to continue to increase production capacity in the third quarter, but had to change its production strategy because of actual market conditions.
According to Deborah Yang, research director of DisplaySearch, “TFT LCD panel makers have realized that market demand is weak, and that some global TV brands are experiencing sluggish sales in some regions. Panelists adjust their capacity utilization rate in the third quarter, maintain low inventory and control production. In order to stabilize panel prices, reducing capacity utilization means that panel makers must effectively balance the pros and cons of oversupply and price declines with increasing depreciation costs due to reduced capacity utilization."
DisplaySearch estimates that although panel makers expect increased demand from Chinese TV brands and quarterly consumer demand in the third quarter, panel makers will not increase capacity utilization as a whole.
The DisplaySearch MarketWise-LCD Industry Dynamics report also includes the following research content:
l. Due to orders adjustment by TV brands, total panel shipments in June increased by 6% QoQ and 7% lower than expected.
2. Looking forward to the third quarter of 2011, many panelists are very cautious because the TV market is negatively impacted by the macro economy, even though it is during the seasonal sales season.
3. The inventory level of panel products is good at the end of July: LCD TV panels are 7-8 days, display panels are 7 days, and mobile computer panels are 6 days.
4. In May, panel makers shipped a total of 4.24 million panels to Chinese TV makers, an increase of 8% month-on-month, which is 7% higher than DisplaySearch's forecast. The planned shipment volume in June was 4.37 million, an increase of 3% month-on-month.
5. New Chi Mei still dominates the Chinese TV panel market with a market share of 35%; followed by Samsung 21%, AUO 20%, and Lejin 16%.
6. The strong sales during the holiday in May made Chinese TV manufacturers confident in the demand for the future Chinese TV market. Industry surveys show that the order volume of Chinese TV manufacturers during the forecast period has not been adjusted. The shipment of LCD TV panels from Chinese TV makers is relatively stable and is expected to create a peak shipment in August.
7. LCD TV OEMs and ODMs such as Foxconn, New Chi Mei, TPV, Compal, and Rui Xuan plan to increase production capacity by 21% and 15% respectively in August and September.
The average capacity utilization rate of large-size TFT LCD panels decreased in the first quarter of 2011, and the production capacity in April was 79%. In the second quarter, market demand surged, and panel makers increased capacity utilization rate, which will reach 85% in June. The panel maker originally planned to continue to increase production capacity in the third quarter, but had to change its production strategy because of actual market conditions.
According to Deborah Yang, research director of DisplaySearch, “TFT LCD panel makers have realized that market demand is weak, and that some global TV brands are experiencing sluggish sales in some regions. Panelists adjust their capacity utilization rate in the third quarter, maintain low inventory and control production. In order to stabilize panel prices, reducing capacity utilization means that panel makers must effectively balance the pros and cons of oversupply and price declines with increasing depreciation costs due to reduced capacity utilization."
DisplaySearch estimates that although panel makers expect increased demand from Chinese TV brands and quarterly consumer demand in the third quarter, panel makers will not increase capacity utilization as a whole.
The DisplaySearch MarketWise-LCD Industry Dynamics report also includes the following research content:
l. Due to orders adjustment by TV brands, total panel shipments in June increased by 6% QoQ and 7% lower than expected.
2. Looking forward to the third quarter of 2011, many panelists are very cautious because the TV market is negatively impacted by the macro economy, even though it is during the seasonal sales season.
3. The inventory level of panel products is good at the end of July: LCD TV panels are 7-8 days, display panels are 7 days, and mobile computer panels are 6 days.
4. In May, panel makers shipped a total of 4.24 million panels to Chinese TV makers, an increase of 8% month-on-month, which is 7% higher than DisplaySearch's forecast. The planned shipment volume in June was 4.37 million, an increase of 3% month-on-month.
5. New Chi Mei still dominates the Chinese TV panel market with a market share of 35%; followed by Samsung 21%, AUO 20%, and Lejin 16%.
6. The strong sales during the holiday in May made Chinese TV manufacturers confident in the demand for the future Chinese TV market. Industry surveys show that the order volume of Chinese TV manufacturers during the forecast period has not been adjusted. The shipment of LCD TV panels from Chinese TV makers is relatively stable and is expected to create a peak shipment in August.
7. LCD TV OEMs and ODMs such as Foxconn, New Chi Mei, TPV, Compal, and Rui Xuan plan to increase production capacity by 21% and 15% respectively in August and September.
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