According to iSuppli's view, the rebound of key specifications panel prices indicates that the large scale LCD business environment is changing towards the direction conducive to suppliers, which is the first time this year.

In late July, the price of desktop PC began to rise with the 17 inch panel price. The price is expected to continue to rise in August, and the most popular 17 inch panel price declines have been going on for three quarters.

ISuppli even expects that the 17 inch panel will continue to rise in the second half of this year. The overall growth rate in the second half of this year is likely to reach 19%. It may reach 123 dollars in December and only 102 in July.

Liquid crystal mutation

The price increase marks the end of the weak performance of the large-size LCD market since 2005 (iSuppli said the "big size" panel is more than 10 inches).

The price of the 17 inch panel since last October has been mainly caused by four factors: the demand is much lower than expected, the increase in panel size in the PC channel, the increase in the capacity of the new generation of panel factories, and the decrease in the stock level by the brand manufacturers in order to reduce risks.

The combined effect of these factors stimulates the continued fall in prices, but by June this year, most of the LCD panel suppliers' stock levels were normalized, while the fall prices stimulated demand, resulting in a low inventory level, resulting in the current price rebound.

LCD cuts

At the same time, most of the LCD panel manufacturers have begun to reduce capacity utilization in the second half of the second quarter of this year. From the end of 2005 to the level of 85%~90%, they have begun to cut infrastructure spending. Many panel manufacturers have announced a reduction of 2006 and 2007 capital construction costs and delayed the construction of 7.5 generation and 8 generation panel factories.

World Cup setbacks

ISuppli LCD and projection Survey Department Sweta Dash said: "LCD panel manufacturers reduce production efficiency and reduce basic investment is the second quarter of the poor sales and very low profit margins resulted in the inevitable result, because supply exceeds demand, the second quarter LCD panel market development significantly slowed down the World Cup did not bring a very good market demand.

Quarterly demand is low and inventories are increasing. LCD and notebook panel sales are not satisfactory, making the market more vulnerable.

Now, the sharp price cuts of new products and notebook processors have greatly stimulated the market, and the PC panel market has shown good prospects.

Capital contraction

Panel suppliers to reduce infrastructure investment this year and next year will tighten supply, thereby slowing down the LCD TV panel price cut trend in the second half of this year.

And the high demand for Christmas shopping holidays may create strong prices at the end of the year.

The construction of a more advanced panel factory also means that when the demand for TV panels grows, the supply of PC and notebook panels will be squeezed so that prices will soar.

All in all, the demand for liquid crystal market is good, and the poor supply situation makes the overall trend of panel price rising.

Supply LED market to demand driven market pformation

Dash said: "reducing infrastructure investment and capacity utilization shows that the supply expansion, price reduction and demand creation strategies of LCD panel manufacturers have failed in the TV panel market unless they or partners can come forward to create new end-user demand structure."

Many panel makers now think that it is not necessary to build the 8 generation panel factory, because the 8 generation factory is very efficient only when making 50 inch TV panels, and the demand for such large size panels is very limited.

However, SHARP and Samsung have no choice but to build the 8 generation plant, hoping to gain the advantage of the market pioneer to win the needs of this particular consumer.

ISuppli believes that the large size panel industry has already gone through a period of fanatical expansion, and has begun to rationally decide the production level from the market demand, and the overall market situation is also improving in the right direction.

Latest news: according to DisplaySearch data, the revenue of large-size LCD panels increased by 23% in the second quarter. Taiwan panel makers expect 15, 17, 19 inch widescreen panels to continue to rise in October September.