LCD Panel Manufacturers to Maintain Capacity Utilization Rates at 85% in Third Quarter

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Large-area TFT LCD panel price increases halted in mid-June due to an uncertain demand outlook for Q3’11. While demand is slowing down, especially in the TV market, the supply side is making adjustments to prevent drastic panel price fluctuations. Panel makers originally expected to raise capacity utilization—the ratio of actual output to total available capacity—to an average of 90% in Q3’11. However, as indicated in the July edition of the DisplaySearch MarketWise-LCD Industry Dynamics, TFT LCD capacity utilization will remain at 85% from July to September.

Around this time of the year the supply chain works overtime to fill up inventories for fourth quarter sales. Usually. And that means utilization rates hover around 90%. The overall utilization rate in May was 80%.

With a struggling economy, an uncertain future with the end of Quantitative Easing 2 (QE2), and the disappearing middle class in the U.S. I am unsure if folks in the U.S. will have enough disposable income to buy all the LCD TVs, monitors, notebooks, tablets, and smartphones that the industry is currently manufacturing.

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