As vendors start raising the price of flat panel TVs, and in some cases selling models at below cost, consumers are cutting back on the purchase of large screens claims research group iSuppli.
They claim that TV panels have dropped in price by as much as 30% monitors by 45% and that notebooks have fallen by up to 40% yet despite this Companies like Sony and Panasonic are introducing big price rises due to the fall in the Australian dollar and the rise of the Japanese Yen. (See seperate {Panasonic price rise story).
Forecasting an 5% decline in large LCD TV purchases this quarter iSuppli said “Television, monitor and notebook PC makers are slashing orders for large-sized LCD panels due to weak sales, reflecting the global downturn in consumer and corporate demand,” said Sweta Dash, senior director of LCD research at iSuppli. “The recession in the global economy has impacted all areas of the electronics value chain, including large-sized LCDs, an area that will continue to struggle into the first quarter of 2009.”
Liquid-crystal crisis
The large-sized LCD panel market has been struggling through severe oversupply conditions since the beginning of June due to lower-than-expected panel demand and high levels of inventories building up throughout the LCD supply chain. To make matters worse, the market was pushed back into a state of further oversupply, rather than recovering at the end of September, due to the financial crisis that impacted global demand in the second half of September.
“Panel prices are continuing to fall, even though some prices are already at or even less than the cash cost level,” Dash said. “Monitor panel prices have declined by 40 percent to 45 percent since June. Notebook prices also have decreased by 35 percent to 40 percent during the same period. Meanwhile, television panel prices have dropped by 25 percent to 30 percent.”
Some television panel prices have been declining since the first quarter of 2008, while monitor panel prices have been dropping since the end of the second quarter of 2008. The average 32-inch television panel price declined from $335 in January 2008 to the $200 to $210 range by November.
Oversupply spurs utilization cuts
Faced with severe cuts in panel profitability and continued price reductions, LCD suppliers have cut back on manufacturing by as much as 50% say the research Company.
iSuppli claim that revenues will fall by up to 8%. However, the revenue impact may be even greater in 2009 unless the market can stabilise by the third quarter of the year.
