As we move towards the end of the holiday build schedule, the market is focusing on the first quarter of 2008. Manufacturers are definitely going to pay attention to lessons learned in 2007, but the booming economies of developing nations is certainly going to keep all market participants on their toes. No doubt, there will be shortages! But, the question everyone is asking right now…is where?
Notebook
We are beginning to see the notebook panel market stabilize as we approach the end of the holiday build cycle. Overall, open market demand is curtailing, but we do expect to see spot shortages for select items running into the beginning of November. The spot shortages are around mainstream sizes of 14.1”, 15 and 15.4” sizes. OEMs need to have ordered panels in house by the third week of November in order to complete their scheduled shipments. Demand will decrease as we approach December with few shortage items. Two models we are seeing strong open market demand for is LG’s 14.1” panel, part number LP141WX1-LTA, and AU’s 15.4” panel, model number B154EW02.
Looking forward, demand historically softens in the first quarter. However, manufacturers will try to keep prices firm for mainstream sizes in anticipation of the upcoming Chinese New Year. This can often be a catalyst for sales; but the effect remains to be seen as last years New Year did not offer the spark manufacturers had hoped for. As a result, the market trend turned downward in early 2007 for several months as the market burned off accumulated stock.
Monitor
Open market demand for 15” and 17” panels has stabilized. However, do not expect to see prices decrease. As market demand shifts to larger sizes, factories will adjust prices accordingly in order to maintain margins without losing economies of scale. Additionally, the manufacturers do not want to stimulate demand that they can not support. Open market demand will be model specific. As an example, due to Samsung abandoning the 15” sizes, and its wide use and long run rate in the market, Samsung’s panel, LTM150XH-L06, is expected to be in hot demand over the next several months.
The 19” size is still under pressure with limited supply, with particularly strong demand for wide models. Mainstream 19” panels are trading in the $155-$180 range depending on the model. While high end models with enhanced capabilities such as AU’s M190EG01 V.0 and its increased viewing angle are fetching a premium, it is trading in the low $200.00 range.
Industrial Panels
Although less volatile than the commodity products, the industrial panel market will always see a level of shortages due to the long life cycle of the products that the panels are used in. The manufacturers’ overall strategy is to keep prices firm by dedicating limited capacity to the industrial sector; building against customer forecasts. In the event of an upside, customers are forced to the open market.
Manufacturers have managed to keep a level of equilibrium in the IPC market but with the booming economies of the developing nations it is difficult to forecast demand. This may result in potential shortages as OEMs arrive at the manufacturers door step with unanticipated demand. China is building out of its infrastructure for the 2008 Olympics. This has the potential to really upset the established equilibrium. We are seeing manufacturers such as ICP Electric and Advantech increase their support of their industrial customer base.
TV
Demand is expected to remain robust going into the month of November in order to support Christmas sales. Global demand for TV panels has doubled from year to year. 32” panels continue to be under severe shortage with lead times from four to six weeks. Direct prices are expected to increase anywhere from $5 to $10 dollars per panel. Two panels that we are seeing strong demand for are AU’s panel T315XW02 V.1 and LG’s 32” panel, part number LC320W01-SLB1.
Pricing for larger panels has stabilized due to manufacturers anticipating demand by keeping increased levels of on hand inventory in order to meet holiday demands.
