November 9, 2006
The LCD market continues to show strength. However as we move into the second half of November Horizon expects the market to flatten moving into December, when most OEM’s close out their purchases supporting the holiday season. Despite slow demand, manufacturers will try to maintain pricing in anticipation of sales generated from the Chinese New Year in February.
There is an undocumented rumor that glass may be in short supply during Q1. If true, expect considerable pricing moves across all product lines come Q1.
Monitor
Monitor panels have been in strong demand throughout the year, particularly in mainstream sizes of 15”, 17”, and 19”. Factories are still trying to create the impression that these panels are still in short supply, despite slow demand over the past two weeks. Market participants report that manufacturers, including, Hydis, LG, and Samsung are discreetly dumping inventories of 17” monitor panels. The offerings are at least 2,000 to 3,000 units at a time through unofficial broker channels. The short-term effect of such marketing practices remains to be seen, and is dependant on the ability of the Asian market to be able to absorb the excess supply prior to the Chinese New Year. If the demand fails to materialize, a correction might be immanent. Over the next month, Horizon expects to see prices remain flat or decrease by $3.00 to $5.00 a panel until panel consumers have a clearer picture of what the Chinese New year will bring them.
Notebook
The Notebook panel market has fluctuated somewhat moderately in comparison to monitor panels in the past several months. However, November has been a strong month for Notebook panels, with prices increasing from $3 to $5 per panel. 14.1”, 15.0”, and 15.4” sizes continue to be the most active with an increase in demand resulting from the transition of manufacturing capacity to larger sizes. B141XG09, B150XG02, and LTN154X1-L03, have been in strong demand. Horizon expects pricing to remain linear throughout November.
Industrial
Over the past few weeks, Horizon has seen an increase in demand for small form factors of 6.4” and 8.4” in addition to the 10.4” and 12.1” sizes that Horizon saw demand for in the beginning of the month. Sharp continues to be in the highest demand, pushing lead times out to 14 weeks for many of their panels.
Year-end budget spending in the public sectors is expected to create a short-term demand. Typical to the industrial markets, factories are working off of tight production schedules by taking scheduled orders only - leading to limited availability of industrial panels in the market. The combination has the potential to create a short term spike in the market over the next month.
TV
Panels for TV applications remain in high demand, particularly for the size of 30” and larger with the 40” size as the primary profit generator. According to market publications, Sharp has just announced that it will start its 8th generation production plant located in Gueishen, Taiwan, in January 2007, or two months ahead of the original schedule. This will allow Sharp to compete directly with the market leaders, and Sony with the strongest LCD TV markets in the US and China. With prices steadily decreasing over the past few months, it will be interesting to see if manufacturers begin to shift capacity to other lines to stabilize pricing.
