TFT-LCD panel makers are expected to suffer from serious inventory issues throughout this year, with LCD-TV panel inventory likely to reach 15 million units in 2006, according to estimates from Taiwan-based panel makers.
The global supply for LCD-TV panels will total 55 million units in 2006, while worldwide demand for LCD TVs will only attain 40 million units, Taiwan-based panel makers noted.
Although demand will pick up during the second half, amid strong seasonality, the oversupply of panels will still drag down panel makers' profitability, sources indicated.
Currently, with the exception of Samsung Electronics, such panel makers as LG.Philips LCD, Chi Mei Optoelectronics (CMO), Quanta Display (QDI) and Chunghwa Picture Tubes (CPT) are all facing LCD-TV inventory problems, sources at the Taiwan-based panel makers pointed out. Sources at the Korea-based panel makers even indicated that CMO is seeing its 32-inch LCD-TV panel inventory level increase to about one month, while LG.Philips LCD also has its 37-inch LCD-TV panels piling up.
However, some panel makers stressed that an inventory level of 15 million units may not necessarily occur, if panel makers adjust their production appropriately. In addition, better-than-expected demand for LCD TVs may also help ease oversupply.
Samsung Electronics, LG.Philips LCD, AUO, CMO and Sharp are the leading LCD-TV panel makers, worldwide, accounting for nearly 95% of the global TV market. Samsung Electronics is supported by its own-brand business, along with strong sales of the Sony Bravia series, while Sharp's output is not as high as that of others. Therefore, once LG.Philips LCD, AUO and CMO further slow their production, the supply and demand of global LCD-TV panels are expected to be more evenly balanced, later this year, Taiwan-based panel makers stated.
In addition, the ASPs (average selling prices) of LCD-TV panels will continue declining and may not rebound until prices for the 32-inch and 37-inch segments fall to US$360-370 and US$540-560 respectively, the sources added.
ASPs for 32-inch and 37-inch panels fell sharply to US$410 and US$610 respectively, during the second half of June, according to WitsView Technology.



