According to a Bloomberg article, Sharp‘s CEO Katsuhiko Machida mentioned that LCD panel prices may stop falling in March, “The price will hit the bottom when inventories are gone, and we estimate that will happen by the end of this March.” LCD manufacturers have been experiencing extreme stress in the second half of 2008 where inventory was building and demand for LCD products were collapsing.
LCD suppliers throttled down LCD fab utilization rates to historical lows to prevent continued build-up of inventory in the channel. LCD panel prices had decreased to below cash cost and some suppliers even refused to sell any LCD panels at below cash cost due to heavy lossses. Sharp also announced in December that two LCD panel production lines at two plants located in western Japan would be closed to maintain profitability.
“At their worst last year, LCD panel inventories rose to 14 million. Since most LCD makers started postponing new investments last fall, supplies are decreasing rapidly,” according to Machida. Sharp reduced its net income foreast by 43% to JPY60 billion (about US$669 million) for the year ending March 31.
[tags]Sharp, Katsuhiko Machida, LCD Manufacturer, Display Manufacturer[/tags]