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Losses in TFT-LCD biz trigger component price war

Posted: 04 Feb 2009     Print Version  Bookmark and Share

Keywords:TFT-LCD  colour filter  driver IC  LED BLU 

Tier 1 panel manufacturers are posting huge financial losses, evident in their financial results in Q4 of 2008. According to WitsView Technology Corp. (Taiwan), the component price war is expected to be exceptionally intense in Q1 of 2009, as obtaining lower cost materials has become one of the most efficient ways to improve business.

Due to the severe market slowdown, not only have glass substrate makers conducted large-scale plant maintenance, but have also been forced to make larger price concessions. The quarterly price drop is expected to hit 5 to 7 per cent this quarter.

For colour filters, the current low utilisation rates have prompted panel manufacturers to focus on consuming their in-house supply. This has made it even more difficult for some professional colour filter manufacturers to secure orders, thus spurring them to further reduce their colour filter prices. General speaking, the price drop for this quarter is above 10 per cent.

For polarizers, in the monitor segment, although 16:9 models are gaining popularity, the unfavourable margin is weighing on its production volume and will result in a smaller polarizer price drop—roughly the same level as traditional 5:4 or 16:10 models. The drop in the NB sector will be more moderate than in Q4 of 2008. As for the TV portion, since panel manufacturers continue to demand more price cuts, the drop for the mainstream sizes will be 8 to 12 per cent.

The driver IC segment currently faces inventory problems. In addition, their customised design makes them difficult to be shared among different customers, rendering it to become an arguing point for buyers to ask for price cuts. The price cut of mainstream source IC will be 8 to 10 per cent. Due to the weak demand of the market and the gateless design trend, the demand for gate IC continues to decrease. Needless to say, the price modification is very obvious.

Given more than 35 per cent price decline for 2008, LED BLU (backlight unit) has prompted most panel manufacturers and brand vendors to begin developing or adopting such light sources for its NBs. Their main objective this year is to further narrow the price gap with the CCFL BLU, and stimulate the end product demand. A minimal 10 per cent price decline will be seen this quarter. The price cut of monitor and TV BLU is approximately 10 to 15 per cent. TV backlight designs are also moving to a more low-cost structure. Finally, despite the ongoing power-saving green panel trend, which received much attention last year, the "low-cost" drive will render its demand to be relatively moderate for the time being.

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