December 14, 2006
There is more than adequate manufacturing capacity in order to meet current panel demand. The LCD market is exhibiting the classic supply and demand cycle resulting in the overall trend of panel pricing shifting downward. Pricing for more popular panel sizes are increasing, while less desirable sizes are quickly decreasing, as manufacturers continue to shift capacity to meet demand and grab market share. With TV sales not meeting expected demand, manufacturers are beginning to shift their perspective from profits to recouping capital costs. LG/Phillips announced that it will be shifting capacity at its 7.5G plant from 42 and 47 panels to 19 sizes.
An obvious development in the market is the investigation of panel manufacturers who have been caught price fixing. If one were to draw a comparison to the DRAM price fixing scandal from several years ago, resulting in Hynix DRAM fabed in Korea, it will continue to carry a 40% import duty into the United States. If LCD manufactures are convicted of price fixing, the impact on the market will be significant and warrants being followed.
Monitor
Prices for 15 and 17 sizes are expected to move downward $3 to $5 dollars over the next month based on the latest pricing info from the factories. Market demand has shifted to 19 and 21 sizes. The shift in manufacturing capacity to these popular sizes has offset any potential for price increases. Horizon expects to see the market correction back to Q3 2006 pricing in the next several weeks. There have been pockets of demand where demand exceeds supply especially with part number - M220EW01 and LM190E03 -TLB2.
Notebook
As forecasted in our previous update, there has been little change in the notebook market.
Horizon expects the market to remain fairly linear over the next few weeks. Wide screen panels continue to be the highest in demand. There is an increase in demand for 14 and 15.4 sizes and a continued open market demand from high-end system manufacturers for 15.2, 15.4 and 17.1 sizes. Horizon has seen market demand for these particular part numbers B152EW01 and LQ154M1LW12.
The more interesting point surrounding the notebook market is in the after service market with continued demand for 15 and 17 sizes. We have seen significant open market demand for Toshiba panel LTD141ECEF and Samsung panel LTN150PG. Several OEMS have complained that Samsung has been trying to push them to drop in replacements rather than ship the part number ordered.
Industrial
The general market trend for industrial components is stable with a few trouble spots. Several industrial customers indicated that the recent obsolescence by Samsung of their 21.3 panel, part number LTM21.3U6-L01 has caused some headaches. In the past, Sharp has been delinquent with their shipments, but is now on schedule with their deliveries.
Trends to watch for: The significant price drops in 3:4 aspect ratios and VARs developing standardized panel and rack systems (open frame). Several part numbers remain in demand such as the LTM12C275C and the LQ064V3DG01.
TV
TV panels continue to be the focal point of manufacturers. Sony recently announced its intention to boost its television LCD shipments by 60%.
The TV LCD market segment is the most competitive segment of the LCD market. For example, the 15 through 20.1 sizes, are selling a few dollars above manufacturing cost, leaving little room for further price erosion. Horizon expects to see 32 and 37 size panels to drop between $5 and $10 dollars a panel while 42 sizes are expected to drop $15 to $20 over the next month.
