Tuesday, July 22, 2008

LCD panel pricing trending toward production costs in some segments

Rebecca Kuo, Tainan; Rodney Chan, DIGITIMES [Monday 21 July 2008]

LCD panel makers are seeing prices for some popular segments, such as in the 32-inch TV panel segment, drop close to production costs, and prices could fall below production costs by the end of the fourth quarter, according to industry sources.

Typical 32-inch TV panels for the second half of July are being quoted at US$285, down US$13 from the first half of the month, according to DisplaySearch's latest panel pricing figures.

The sources indicated that first-tier panel makers' average costs for 32-inch TV applications in the third quarter are about US$260. And if the pace of current downward trend continues, prices for the 32-inch segment may have dropped below production costs by the end of the fourth quarter, the sources remarked.

For 42-inch full HD TV panels, DisplaySearch figures put quotes of typical panels at US$505 for the second half of July, down US$5 compared to the first half of the month.

The sources noted that while first-tier panel makers production costs' for the 42-inch segment are about US$490 for the third quarter, there is a good chance that the quotes may drop below production costs in the third quarter.

Panel makers are now reducing their output in hopes to curb the price slump. The sources commented that prices in August may fall at a much slower pace because of a seasonal increase in demand, but the end of the high season later this year may trigger another wave of pricing pressure.

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