Some LCD suppliers expect fourth quarter LCD TV panel pricing to continue falling; others disagree. AU Optronics (AUO), Chimei Innolux (CMI) and LG Display (LGD) will most likely reduce utilization rates by 5-10%. By modulating supply the three LCD manufacturers will attempt to maintain further erosion of LCD panel prices. LCD suppliers expected LCD TV panel prices to rebound in August but instead kept declining. Aggressive negotiations by brands and OEM/ODMs could bring the price of LCD TV panels close to cash cost levels.
AUO and CMI are expected to reduce their utilizations rates to 90% or lower. LGD is expected to bring its utilization rates down to 95% in the third quarter. This is an interesting development as LGD has been unable to completely supply iPad IPS TFT LCD panels. My assumption is that LGD is in the process of loading iPad LCD panels on larger fabs. I also expect a new iPad to be announced next January with an improved LCD with a Retina Display-like resolution of close to 300PPI. If that happens LGD will need to figure out a way to load 9.7-inch LCD panels on larger fabs to improve production and lower manufacturing costs. That could be a perfect opportunity to reduce smaller-sized LCD TV panel manufacturing, lower inventory levels and supply what is more in demand.
Will fourth quarter demand for LCD TVs materialize? That’s anyone’s guess, but I doubt it. The next big push by TV brands has been 3D. I’m bearish on 3D since there is no industry standard. Personally, I don’t think I can get used to wearing another set of glasses to watch TV in 3D; I think it’s worth it in the theaters. Edge-lit LED-backlit LCD TVs make the chassis thinner but more expensive without providing better picture quality. Back-lit full LED backlights improve picture quality quite a bit but are quite expensive. Then you have power-sucking plasma TVs that are getting quite cheap, but I think plasma is on its way out despite being the better technology for fast-moving motion pictures. If I were in the market for a TV I’d be thoroughly confused as to what to get. And that might prevent demand for LCD TVs from materializing as well as empty wallets and bank accounts. Source: Digitimes