LCD prices slide on lower inventory

The decline in prices of liquid-crystal displays used in computers and televisions continued this month as Asian suppliers cut inventory, an analyst said.

The price of a desktop monitor screen measuring 15 inches diagonally fell to US$155 in the first two weeks of November from US$160 in October, Taipei-based WitsView Technology Corp said. The price of a 17-inch screen dropped to US$170 from US$180, reported China Daily Thursday.

"Certain panel makers attempted to do inventory adjustment by lowering their average selling prices," WitsView analyst Henry Wang said.

Prices of screens in the US$36 billion industry dominated by Samsung Electronics Co of South Korea have tumbled by more than a third since the middle of this year after 18 months of gains. Suppliers may start to post losses in the fourth quarter as prices for a 17-inch screen fall below US$180, Wang said.

Some companies are already losing money. HannStar Display Corp, Taiwan's fourth-largest LCD maker, last month said it had a third-quarter loss of NT$319 million (US$9.4 million).

Suppliers have cut prices to meet demand for the Christmas holiday season, Wang said in October.

Taiwan's AU Optronics Corp, the world's third-largest LCD maker, on October 27 said it may show a fourth-quarter loss after reporting an 18 per cent profit decline in the July-September period on falling screen prices.

The company cut its full-year sales target to NT$162.4 billion (US$4.8 billion), compared with an April forecast of NT$187 billion (US$5.5 billion), and lowered its 2004 net income outlook to NT$29.1 billion (US$857.3 million). In July, the company said it was sticking to its full-year profit goal of NT$41.7 billion (US$1.2 billion).

AU Optronics in September said prices have fallen "unreasonably" because rivals are adding to overcapacity. The company said prices have not stabilized because of new output from LG.Philips LCD Co of South Korea.

LG.Philips LCD has started production at a new factory that is making screens for computer monitors instead of TVs, as it was originally intended, because demand for flat-panel TVs has failed to meet expectations, AU Optronics spokeswoman Anny Chan said.

South Korea's LG.Philips, the world's second-largest maker of LCDs, declined to comment.

AU Optronics said it has "no visibility" on demand for the Christmas season because of uncertainty caused by rising oil prices, which may hurt consumer buying in the United States.

Crude oil for November delivery reached a record US$55.33 on October 18, and prices are about 80 per cent higher than a year ago.

The supply glut of LCDs will worsen to 8 per cent next year from 6 per cent this year because of additions to production capacity during the period, according to Merrill Lynch Co analysts Jeffrey Su and Daniel Kim.

Source: China Daily