The level of inventory in panel makers’ fabs and in the sales pipeline is a key variable for TFT LCD supply and demand. DisplaySearch’s newly published MarketWise-LCD Industry Dynamicsreport shows that panel makers’ inventories returned to a healthy level at the end of December—eliminating concerns over excess inventories in the previous two months.
On average, TFT LCD inventories, defined as finished modules held by panel makers, are down to 7-8 days for TV panels, 6-7 days for monitor panels and 5-7 days for notebook PC panels, which are all manageable levels for panel makers. In addition, panel prices, especially LCD TV, are stabilizing because there is little inventory pressure pushing panel prices down.
This includes LCD module stocks not booked by customers and kept in panel makers’ end, excluding in-transit and the VMI (Vendor Management Inventory hub).
Source: DisplaySearch MarketWise-LCD Industry DynamicsReport
While panel makers have safe inventory levels, there are still concerns about high inventory for brands. DisplaySearch found that TV, monitor and notebook PC brands are holding medium (4-5 weeks) to high (more than 6 weeks) supply chain inventories. This explains the brands’ restrained production plans in Q1’11.
In the US, Q4’10 sell-through was positive, mainly for CCFL models, but not all brands benefited. Most brands are still facing high inventories for LED-backlit LCD TV models. In Q1’11, brands will put more focus on promotion of LED-backlit LCD TVs before new models come on line in March. In China, the fair sell-through during the holidays helped to lessen inventory pressures by the end of December. As a result, DisplaySearch estimates the LCD TV inventory to fall to medium to high levels by the end of December.
Deborah Yang, Research Director at DisplaySearch, noted, “With the strong production in Q4'10, we estimate Chinese TV brands were still carrying extra set inventories at the end of 2010, and some of that is for the upcoming Chinese New Year. In Europe, sales have TV brands worried, so the brands’ inventory will still be a concern in Q1’11.”
Although inventory levels for LCD monitors were in the medium range before November, slow sales in China were highlighted by the major LCD monitor brands in China as a cause of concern about the increased inventory at the end of 2010.
Additional observations about LCD industry dynamics in the MarketWise-LCD Industry Dynamicsreport:
Panel makers plan for large-area panel shipments to trend down in January, with a 2% decline M/M, and TV panel shipments will drop the most, falling 9% M/M. Notebook and slate PC panels shipments, however, will increase by more than 5% M/M because of the pull-in of demand from February. That is being done to prepare for new models launched in Q1'11, as well as the fast-growing 9.7” slate PC panel shipments.
The top 16 LCD TV brands’ monthly production was 18.4 million in October, 18.3 million in November, 15.9 million in December, 17.1 million in January, 2011, 13.8 million in February, and 15.4 million in March.
In December 2010, 60% of Samsung LCD’s TV panel shipments were to Samsung and Sony, and 45% of LG Display shipments were to LG Electronics and Vizio. Samsung TV is the largest client of Chimei Innolux.
LCD TV panel shipments to China are forecast to fall from 15 million units in Q4’10 to 13 million units in Q1’11. Chimei Innolux is expected to lose market share from Q4’10 to Q1’11, while LG Display and Sharp will gain share.
The top five notebook PC OEMs will decrease production in January by 2% M/M, to 13.7 million. In February, they plan to reduce production to 11.2 million before the production rebounds to 15 million in March 2011.
The new DisplaySearch MarketWise—LCD Industry Dynamicsreport provides clear and accurate monthly status and dynamics updates on the entire large-area TFT LCD supply chain, from components to the end market. Clients of this report have access to monthly updates on panels, brands, capacity, production, prices and more.
Contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail firstname.lastname@example.org contact your regional DisplaySearch office in China, Japan, Korea or Taiwanfor more information.
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