Shipments of large-sized LCD panels vastly exceeded end-market sales of televisions, monitors and notebook PCs in the first half, spurring a major buildup of inventory of the LCDs and finished products, including LCD-TVs, according to iSuppli.
The research firm finds that a total of 46.8 million LCD-TV panels shipped in the first quarter of 2010. However, although LCD-TV set shipments equaled only 37.5 million units—an overage of 24.5 percent, iSuppli’s electronic display industry analysis indicates.
In the second quarter, large-sized LCD-TV panel shipments grew to 52.0 million units, but actual set shipments amounted to only 38.7 million units. This gap of 36.4 percent, higher than anything seen in 2009, has pushed the market to further levels of oversupply, especially in the face of an uncertain outlook in the second half of 2010.
“Coming amid fears of a slowing economy and the possibility of a double-dip recession, the inventory increases in the LCD TV retail channel are raising concerns throughout the display supply chain—from panel suppliers to contract manufacturers and brands, to retailers,” said Sweta Dash, senior director for LCD research at iSuppli.
According to iSuppli, inventory levels for both suppliers and buyers have caused a ripple effect on pricing as large-sized LCD panel pricing dropped again in July, taking some panels down to the manufacturing cost level. In August, prices dropped another 4.4 percent because of the continuous inventory adjustment, with a further decline expected in September.
Some low-priced panels were already reaching the cash cost level—and the oversupply situation is not helping matters, iSuppli indicates. These developments have prompted a series of production cuts by some panel suppliers in order to bring panel supply and demand back to balance.
Although pricing for the LCD-TV sets themselves surged upward in July in the United States, prices are likely to have declined in August and will do so again in September, as brands and retailers have to become aggressive once again with their promotions in the upcoming months in order to fuel demand, iSuppli believes.
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