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LCD Panel Makers’ Inventory Returned to Healthy Levels at the End of 2010

Thu, 01/20/2011 - 6:26am
General Electric

LCD Panel Makers Inventory Returned to Healthy Levels at the End of 2010

LCD Panel Prices Stabilizing, Especially for TV

SANTA CLARA, CALIF, January 20, 2011The level of inventory in panel makers fabs and in the sales pipeline is a key variable for TFT LCD supply and demand. DisplaySearchs newly published MarketWise-LCD Industry Dynamics report shows that panel makers inventories returned to a healthy level at the end of Decembereliminating 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.

Table 1: Major Panel Manufacturer Days of Inventory at Month End

Applications

Oct 2010

Nov 2010

Dec 2010

(Estimate)

LCD TV

10-12

8-10

7-8

LCD Monitor

7-8

6-8

6-7

Notebook/Slate

6

5-7

5-7

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 Dynamics Report

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 Q111.

Table 2: Supply Chain Inventory Levels at Brands by Application

Inventory Level

Oct 2010

Nov 2010

Dec 2010 (F)

LCD TV

6+ weeks

6+ weeks

4-6+ weeks

LCD Monitor

4-6 weeks

4-6 weeks

4-6+ weeks

Notebook PC

4-6 weeks

4-6 weeks

4-6+ weeks

This includes sets that are kept in brands hubs and not distributed to retailers, but excludes cargo in transit.

Source: DisplaySearch MarketWise-LCD Industry Dynamics report

In the US, Q410 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 Q111, 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 Q111.

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 Dynamics report:

  • 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 LCDs 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 Q410 to 13 million units in Q111. Chimei Innolux is expected to lose market share from Q410 to Q111, 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 MarketWiseLCD Industry Dynamics report 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. Please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail contact@displaysearch.com or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan for more information.

About DisplaySearch

Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge. In collaboration with the NPD Group, its parent company, DisplaySearch uniquely offers a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on DisplaySearch analysts, reports and industry events, visit us at www.displaysearch.com. Read our blog at www.displaysearchblog.com and follow us on Twitter at @DisplaySearch.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit www.npd.com and www.npdgroupblog.com. Follow us on Twitter at @npdtech and @npdgroup.

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