MANHASSET, N.Y. After 18 months, prices for 10-inch and larger liquid crystal display panels have begun to fall, according to DisplaySearch.
The Austin-based market research firm said in its latest Monthly Large-Area LCD Pricing Report blended large-area thin-film-transistor LCD prices fell 3% from $295 to $285 in July and are expected to fall another 3% in August to $275. Prices are expected to fall 2% per month through the end of the year.
According to DisplaySearch, weakness in the LCD monitor market is fueling larger than anticipated price reductions in notebook PCs and LCD TVs as panel suppliers look to stimulate demand. The market shifted at the beginning of June when leading LCD monitor brands reduced panel orders, claiming reduced demand, rising inventory levels and excessively high panel prices. The weakness in demand resulted from seasonal declines, rising street prices in a price-sensitive market and the emergence of desktop PCs bundled with CRTs selling for under $500.
Historically, LCD prices have experienced peaks and valleys as supply and demand rises and falls. Though no one expected LCD prices to rise forever, much of the recent industry buzz has not centered on when prices would level off but whether there would be sufficient fab capacity to produce large panels for LCD monitors and flat-panel TVs.
The weakening LCD monitor market has caught LCD panel suppliers off-guard, according to DisplaySearch, swelling their panel inventories and increasing pricing pressure. Suppliers have reacted by reducing utilization and pricing at levels desired to reach target street price points expected to reinvigorate the market, the firm said.
According to recent reports, one of the largest LCD suppliers, Taiwan-based AU Optronics Corp., plans to cut panel prices and factory utilization. Another Taiwan-based supplier, HannStar, is reported to be slashing LCD monitor panel prices 15 to 20 percent and may postpone installing equipment at its sixth-generation LCD plant.
DisplaySearch expects monitor makers will not immediately pass along these price reductions to OEMs in order to correct their margins, develop sales campaigns and fill the pipeline at new cost levels. However, the firm expects demand to recover for the back to school and holiday season, slowing price reductions during the fourth quarter as desktop monitor suppliers turn to LCD makers to fill orders.