Taipei, August 6, 2008---According to WitsView’s 1HAug price survey, IT panels will drop by 7~9%, while TV panels will slip by another 3~5%. There is a chance in seeing monitor panel prices falling past their fully-loaded cost in August. There is even a possibility to witness prices falling near the cash cost level, which would mark the lowest acceptable ASP for panel makers. Currently, the main contributor to the persisting price declines lies in the inventory glut and “wait and see” attitude of panel makers.
Amid the economic slowdown, consumer confidence is currently at a low point. Coupled by the unfortunate snowstorm, earthquake and flood events in China, a panel and set inventory glut have occurred. During the end of June, panel makers’ quarterly end shipment pressures and downstream vendors’ inventory controls led to a staggering panel price decline of more than 10% in July. Although panel makers managed to post strong profits in the traditional slow second quarter, they respectively delivered a cautious 3Q08 outlook. Given the accumulated inventory, panel makers have been forced to cut their glass substrate input by 10%~15%. Needless to say, they are all under mounting pressure.
Looking into the second half of 2008, WitsView holds a cautious optimistic outlook. In the wake of the steep panel price drops, it should help stimulate demand, as brand vendors and retailers beckon consumers with even more enticing price tags during September’s back to school, China’s National Day holidays and year-end Christmas sales promotions. After all, consumers have become much more price-conscious, due to the economic downturn. Meanwhile, as panel makers cut their production output, it should also more rapidly clear away the excess inventory. It is difficult to determine whether a stronger-than-expected quarter will occur after mid-4Q08. Yet, as panel makers have not provided any details on whether they will strategically delay the ramp-up schedule of their new production lines set to come online in 2009, there remains a large question mark if a serious oversupply will occur after 4Q08.
|Panel Price List in 1H of Aug/2008 ( Prices are all in USD )|
Founded in the year 2004, WitsView, a subsidiary brand of DRAMeXchange, is composed of a team of TFT-LCD industry experts. The research field covers the development and market trend of upstream components, mid stream panels and downstream system integrators and retailers.
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