Global demand for liquid crystal display shrinks or will continue until the end of the year

According to foreign media reports, the price of the global liquid crystal display has dropped steeply due to the sluggish sales of consumer electronics products in the US back-to-school season and the slowing demand from European consumers. At present, many electronic products including ordinary computers, tablet computers, and televisions use liquid crystal displays.

According to a survey report by WitsView Technology, a Taiwanese market research firm, the price of global computer LCDs has fallen by 15% since July this year, while the price of TV LCDs has dropped by about 10%. .

Some Asian LCD manufacturers have predicted that the global demand for LCD screens will continue until the end of the year.

Global LCD manufacturers have begun to expand their shipments of LCD screens from last year. It is hoped that the 2010 South African Football World Cup will stimulate demand for flat-panel TVs. However, under the current global economic downturn, consumers’ willingness to buy is also curbed, and the LCD industry is starting to face the dual pressures of inventories and overcapacity.

The over-optimistic estimate of the U.S. market, which has the greatest demand for LCD screens, also led analysts to not expect the prices of LCDs to fall so badly. The data released last week by private research agency The Conference Board showed that US consumer confidence index improved slightly in August, rising by 2.5 basis points to 53.5.

Peter Yu, an analyst at BNP Paribas SA in Seoul, said: “The main reason for the decline in TV LCD prices is the sharp decline in the demand for LCD screens in major global markets, including the United States. The speed of decline far exceeds the expectations of LCD manufacturers."

The constant decline in LCD prices has begun to undermine the profits of many Asian LCD makers including LG, AU Optronics, Samsung and Sharp.

In 2009, the total capital investment in the global LCD industry was US$ 11.8 billion. According to analysts' estimates, the global LCD screen maker's capital investment this year will reach 16.9 billion U.S. dollars, an increase of 43% compared to 2009. Analysts said that in order to digest the inventory of the entire industry, there is an urgent need to reduce LCD production.

Sweta Dash, senior director of liquid crystal research at iSuppli Corporation, a data research organization, said: "This year's large-scale capital investment has led to a surge in the output of LCD screens, which has led to excess capacity in the industry."

Samsung declined to comment on the equipment utilization of its LCD screen factory, but the company stated that its LCD production plan is very flexible. If the market situation further deteriorates, the company can make a decision to reduce production at any time.

Sharp also expects that the LCD screen market situation is not yet stable, and LCD screen prices may continue to fall. The company also declined to comment on its potential LCD production reduction plan, but said that its current LCD screen production plants are operating at or near full capacity.