The price decline in TV panels that began at the beginning of the year is slowing as 2013 comes to an end, but TV makers are still not buying liquid-crystal display (LCD) panels in earnest, holding off purchases in the face of uncertain sales ahead while also hoping to strike a better deal, according to a new LCD Price Tracker report from IHS Inc.
Prices for panels larger than 39-inches, for instance, remain sharply down as supply continues to outpace demand. The same is true for some 32-inch panels as well as 46-inch and larger panels, both of which saw the steepest declines in November. In particular, various 32-inch panels were down 2.3 percent on the month, with prices expected to go down another 1.7 percent in December.
Meanwhile, pricing for 46-inch LCD TV panels was down by as much as 2.5 percent in November and likewise projected to dip 1.5 percent in December. Pricing will also retreat during the next few months for some panel sizes in the 29- to 55-inch categories.
Despite the decelerating TV panel prices, TV brands have no clear plans on prestocking for the Chinese New Year in early 2014. Brands not only are hobbled by the anemic outlook for television sales among consumers, but are also adopting a wait-and-see attitude in anticipation of some very aggressive panel pricing expected to materialize during the first quarter of 2014. By then, the lowest price for the 32-inch open-cell could fall below $78, compared to $82 at present.
To be sure, the equivocal stance of TV brands is causing turmoil among LCD panel makers in achieving their 2013 targets. But TV brands also have reason to be cautious, especially in light of sluggish television sales to consumers in China as well as in the Western markets of the United States and Europe.
China, for instance, saw only moderate sales in October, even though its National Day holiday celebration that month is considered to be the hottest shopping season for TVs. The slower-than-expected sales after the holiday resulted in a build-up of set inventory levels in November for various TV brands.
Television makers are also going through a tough time in the U.S. and Europe, where sales during Black Friday as well as the current holiday season have been lackluster.
The slowdown is exacting a heavy toll. For the first time in history, TV panel shipments in the second half of the year will equal the volume reached during the first half-an upending of existing patterns in which second-half sales usually outperform because of the surge in holiday-season shipments-and a possible portent of more difficult times ahead.