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LCD Panel Inventory Increasing, Owing to Oversupply
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LCD Panel Inventory Increasing, Owing to Oversupply
  • By Cho Jin-young
  • June 30, 2015, 03:30
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According to market research firm DisplaySearch on June 29, June is witnessing a continuing downward trend in LDC panel prices. With the average sale price of TV panels staying at US$153 late June, negative growth of -0.9 percent compared to mid-June, the price of TV panels in all sizes has declined, including 40" TV panels. In fact, the downward trend has continued during the first half of this year. 

Industry analysts are saying that if this trend continues, the price of LCD TV panels will decrease by more than 10 percent by the end of 2015, even with growing demand for TVs in the latter half of this year.

This kind of prediction is based on the fact that TV sales are showing negative growth in emerging countries due to continuing weak currency. Moreover, display producers like China's BOE, CSOT, and CEC Panda have started to operate new 8th-generation facilities, contributing to a sudden rise in panel supplies in the future. At first, many in the industry expected that an increase in demand for TVs starting in the second quarter would help large TV makers like Samsung and LG Electronics solve problems with the panel inventory. However, the sales volume of TVs is not increasing, different from initial expectations.

Competition is likely to intensify in the LCD panel market for UHD TVs as well, after being dominated by Korean companies such as Samsung Display and LG Display. Since most of the new 8th-generation factories in China are aimed at the 40" to 60"inch TV market, a game of chicken is highly likely in the category of UHD panels from the latter half of 2015, according to market research firm WitsView.

The proportion of LCD panel manufacturing costs in TV prices is apparently growing despite a fall in the price of TV panels. According to WitsView, the ratio of LCD panel costs in TV prices is approaching 55 percent. LCD panel costs used to account for 25 to 45 percent of TV prices, but intensifying competition between Chinese and Korean TV manufacturers is contributing to a rapid drop in the price of 40" to 50" TVs.