Rebecca Kuo, Tainan; Rodney Chan, DIGITIMES [Tuesday 29 July 2008]
With most major LCD players having cut their production amid slumping prices and a global economic downturn, the LCD panel market in the third quarter looks bleak. But global panel shipments in the third quarter may still stay flat, rather than drop, compared to the second quarter if the market is able to clear its inventory in time.
The sharp declines in prices may stimulate demand. Panel makers still hope back-to-school demand will provide momentum for IT applications, while LCD TV vendors are running pricing campaigns to boost sales.
LG Display (LGD) has joined AU Optronics (AUO) and Chi Mei Optoelectronics (CMO) in cutting production by about 10%. But LGD said its output reduction will last until the end of August, and utilization will rise again in September. It is a demonstration of LGD's expectations that the panel market will still see a seasonal upturn in September.
AUO has said its TV panel inventory is still at healthy levels, and clients are still making preparations for the high season. Although the inventory of monitor panels is about 1-2 weeks higher than normal, the excessive inventory will have been digested by the end of August. Notebook panel inventory is still as satisfactory levels, AUO said.
Panel makers believe the production cut will help clear inventory and bring a rebound sooner.