Panel makers have indicated demand for large-size panels continues to be lower than expected. Hopes for an increase in panel prices have been facing obstacles. Panel makers still expect the third quarter to be better, however, component producers pointed out that order visibility is unclear.
Industry observers pointed out that the economies in the US and Europe have not been healed completely causing demand for IT and TV products to remain weak. China's period of high growth in its LCD TV market has passed, as a result, annual growth for China's TV market in 2011 is expected to be only 15%, far lower than 80-100% in previous years, added industry observers.
New markets such as India, Indonesia, Malaysia and Brazil all have been presenting moderate growth for LCD TVs but have not been able to make up for the lack of demand in mature markets.
There are several macroeconomic reasons for panel makers to be experiencing growing inventory: the slow recovery of the global economy, rising inflation, and the continuous increase in oil prices. These have also contributed indirectly to the flat price of large-size panels.
Panel makers still hold optimistic views for the third quarter, but the return of demand might not be as strong as expected, indicated industry sources.
Panel makers pointed out that if the price falls again due to weak demand, many firms would rather decrease utilization rates than operate at a loss. To obtain positive profits has been the short-term goal for many panel firms.
Upstream component providers indicated that since June, customers have changed order volumes more frequently.
Article translated by Jackie Chang