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Large-Sized LCD Panel Prices Stabilize

Prices for large-sized liquid crystal display (LCD) panels have stabilized because of better-than-expected sales, decreased production and leaner inventories in the supply chain, according to researcher IHS.

LCD tags had declined for five straight months, but declined a negligible 0.1 percent in December, IHS reported. In November, prices declined 0.5 percent after dropping 3 to 4 percent per month earlier in 2011.

Large-sized panels are defined as those having a diagonal dimension of 10.4 to 55 inches and above.

“The firming in panel prices in December can be attributed to lean inventories throughout the supply chain and to lower factory utilization rates,” said Sweta Dash, senior director for LCDs at IHS. Dash added that LCD manufacturers reduced production to control supply and stem financial losses.

Large-sized LCD fab capacity utilization was running at 78 percent in December compared to 86 percent a year earlier. This cut available supply and slowed the rate of price declines during the month.

Dash added that sales increased in the United States and China helped boost the market.

The good news for buyers is suppliers will not increase pricing because of economic uncertainty globally, according to Dash. Chinese demand also is expected to decline after the Lunar New Year sales season in January, which will also prevent prices from increasing.

Among the individual large-sized LCD applications, prices for television panels fell 0.2 percent in December compared to a 0.6 percent contraction in November. Television panel prices are expected to remain flat in the first quarter of 2012, IHS reported.

Global television inventories in the worldwide retail channel reached a four-to five-week low in January after strong holiday sales in the United States and in China following the Lunar New Year holiday. This may cause some television makers to build inventory for future months, according to IHS.

Panel tags fell 0.1 percent in December for the monitor and notebook segments, which individually had dropped 0.2 percent in November.

Meanwhile, corporate demand for desktop PC monitors remains weak because of economic uncertainty. In the notebook PC segment, the flooding in Thailand in October is likely to impact notebook production in the first quarter, affecting LCD panel purchases. As a result, computer makers will adjust inventory and pricing in channels, given the uncertain outlook, according to IHS.