LCD Panel Prices to Decline Inevitably

The latest data show that South Korean-based panel makers LG and Samsung dominated the third-quarter notebook panel market, taking 60% of the total market share, while Taiwan panel makers like AU Optronics and Chi Mei occupied about 25% of the market share.

Liquid crystal display maker LG Display (hereinafter referred to as "LGD") last week released its third-quarter financial results. Thanks to price increases driven by demand for flat panel TVs, LGD third-quarter net profit almost doubled. In the third quarter of this year, Chinese market saw a substantial increase in demand for LCD TVs. Computer monitor, notebook computer and TV LCD panel prices also rose, which promoted an overall upgrading of the LGD performance. Large-sized panels, (referring to 10 inches and above) shipments reached 46.7 million in June, increasing 24% compared with the same period last year. It is the highest ever single-month shipments in the history. LGD market share reached 24.5%, followed by Samsung, a market share of 24.1%.

Sharp recently in Beijing, Guangzhou, Nanjing and other places announced the construction of the 8th-generation LCD panel production line. The preliminary total investment will be more than CNY 100 billion. However, the analysts said that because Sharp has been taking a conservative marketing strategy in the country. Few machine manufacturers in the Mainland use the Sharp LCD screens, so its market share just stands at 7.4%. To honor his proposed occupation in 2013, there seems to be more difficult at present.

As in previous years experience, demand for panels is generally in October and November usher in a peak and then began to decrease in December, but due to the continuing impact of the financial crisis on European and North American markets, panel demand volume expected to drop October, November 2009.

In contrast, domestic firms started to increase orders for LCD panels in August and September in order to welcome the National Day. Panel demand grew rapidly, which makes the panel makers to focus on to China. It is predicted that by 2013 the Chinese mainland's LCD TV demand will reach 50 million units, accounting for 25% of the global market demand. To seize the Chinese mainland market, is equivalent to seize the commanding height of the global LCD TV market.

Since late August, a number of domestic cities have been rumored to build 8th-generation LCD panel production lines. This month, a total investment of USD 4 billion in South Korea's LG LCD screen project settled in Guangzhou Development Zone after LG built a LCD module production base in the city. September 26, Sharp LCD Valley project in Nanjing started construction. Samsung, BOE were also said to build domestic plants. It is reported that the total investment adds up to more than a few hundred billion.

If the panel production line projects are all completed and put into production, China's LCD TV industry will maintain rapid growth in the next few years, but the mainland LCD panel market will inevitably over-supply.

LCD panel markdown will become a trend, It is a good news not only for color TV and notebook makers but also for consumers. An executive for a home appliance retail chain told reporters that at present, LCD panel prices have accounted for 60% -70% of LCD TV cost. In the first half of this year, the shortage of panels once put pressure on the price of color TV sets. However, due to stocking in time, the home appliance retailer's flat-panel TV prices have always remained stable.

Journalists, who visited home appliance outlets in the country, also found all sorts of logos and advertisements, similar to "Made in Japan LCD panels," "hard-screen, touch or look at" at everywhere. In fact, a few manufacturers in the world have panel production technology. Flat-panel TVs on the market, whether it is a joint venture or China-made color TV color TV, nothing more than using the Samsung screen, LGD screen, Sharp screen, and Taiwan screen.

(USD 1 = CNY 6.83)

Source: www.bjbusiness.com.cn (November 11, 2009)

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