Will the LCD Shortage Carry Over Into 2008?
The shortage continues, but supply is changing, and OEMs are facing a new challenge with the shifting market dynamics. Manufacturers are strategically allocating limited capacity to hasten the adoption of newer and more profitable products; creating kinks in the OEM’s supply chain.
The shortage is multi-faceted with the most obvious shortage around the holiday build schedule. What is not so obvious is the prediction for 2008 in the face of growing demand from the third world and the new found affluence in China. It is very difficult to forecast future capacity. The LCD shortage may continue well into 2008.
Notebook panel
As we are three quarters of the way into the holiday build schedule, pressure on notebook panel supply is intensifying. OEMs should expect to see tight supply conditions continue into the month of October. It seems that all sizes are under pressure. The most open market activity is in 4:3 aspect ratios for sizes 14.1”, 15.4” and 17.1”. Horizon is also seeing a strong demand for wide aspect ratio panels (16:9) in 12.1” and 13.3” sizes.
AU and LG have announced price increases of two to three dollars per panel during the month of October and a lead time of 2-3 weeks after the receipt of the purchase order. We are seeing some lead times extending from four to six weeks for select sizes and some from manufacturers such as Samsung’s 15.4” panel. However, there is some talk that OEMs are having a tough time accepting the continuing price increase in a very margin intensive business. As a result, manufacturers are considering leaving September’s prices in place for October.
Consumers of 15” sizes need to watch their supply chain carefully because Samsung will no longer support the 15” size. Consumers are driving demand for larger panel sizes in standard notebooks and smaller sizes (12.1” and 13.3”) for slim and compact notebooks, leaving the 15” as the odd size. We are seeing a strong demand for the 15.4” AU panel B154EW02 and LG’s 14.1” panel LP141WX1-TLA1.
Monitor panel
Shifts in consumer demand and manufacturing capacity is impacting the supply chain in this shortage market. Prices are expected to continue to increase on average of three to five dollars per panel depending on the size and manufacturer. Although still in short supply, we are beginning to see lead times ease for 17” and 19 sizes. Samsung has made the 15” size obsolete due to consumer demand for larger sizes. This is an indication of things to come and expect to see other manufacturers follow suit. As a result we are seeing a high level of open market activity for 15” sizes in the open market as OEMs look to fill ongoing demand for the smaller form factor. We are seeing demand for the Samsung 15” panel LTM150XH-L06 and the 17” panel LTM170EU-L31.
Industrial panel
Lead times continue to extend as manufactures steal capacity from industrial customers to support notebook, monitor, TV, and digital frame demand for the peak holiday season. Manufacturers are not raising prices as a result of demand outstripping supply, but prices are increasing as a result of the overall market conditions. Industrial customers should expect to see lead times stretch; forcing OEMs into the open market to meet upsides and or customer build schedules.
We are seeing the strongest demand for 5.7”, 6.5”, 7” and 8.4” sizes with 7” sizes in the largest demand. Samsung’s 7” panel, part number LTF700WQ-F05 and CPT’s 7” panel, part number CLAA070NA01CT is very active in the open market.
TV panel
TV panel supply continues to be tight with an expected five to seven dollar price increase per panel. Supply and demand for 26” sizes is balanced while demand for 32” and up is exceeding supply. The 32” and 37” is in severe allocation due to capacity allocated to support the popular 42” size. OEMs that did not forecast demand in advance and place orders with manufacturers will not see product until the New Year.
