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Report: LCD Panel Prices Drop 5% In Sept.

11/17/2011 02:59:39 PM Eastern

El Segundo, Calif. - Weak demand forced LCD TV panel prices to
decline nearly 5 percent, which in turn helped to reduce prices on finished LCD
TV products in September, according to market analysts IHS iSuppli.

The most recent IHS iSuppli
LCD PriceTrak report said the panel price declines were the greatest in at
least 12 months, and was the second straight month of price declines greater
than 4 percent.

In August, LCD TV panel pricing fell 4.3 percent following dips
averaging less than 1 percent in the prior four months, according to IHS.

It was the also the biggest panel price drop since September
2010, when prices plunged 5.2 percent. IHS reported that the declines were
continuing into October.

Pricing was similarly depressed for panels used for monitors and
notebooks. Collectively, TV, notebook and monitor panel pricing was down a
collective 3.8 percent from the end of August through September.

That was the largest decline since a 4.1 percent drop in
September 2010.

"Slumping demand in Western Europe and North America are
primarily to blame for the poor performance of LCD TV panels," said Sweta Dash,
IHS LCD research senior director. "Given the already faltering economies of
those regions and the threat of a double-dip recession looming, global LCD TV
shipments continue to suffer, impacting the TV panel market especially hard."

The report said another factor in the declines was the fact that purchases
in China are mostly completed by August in anticipation of the country's
National Day celebrations in October, which general draws a surge in consumer
purchases.

The next big splurge by China on LCD TV panels is not expected
until the end of the year, when the Lunar New Year is celebrated.

Another factor in the declines was the fact that panel suppliers
offered very aggressive prices to TV manufacturers for the forthcoming Black
Friday and Christmas holiday buying season in the United States and Europe.

Pressure to move more TVs has forced lower prices, which in turn
has pressured panel makers to drop their prices on component parts, especially
on LED edge and backlit panels.

"With pricing on some TV panels reaching the cash-cost level,
panel manufacturers cut utilization rates in their fabs to 70 percent in
September, the lowest level for the year," IHS said. "They also trimmed
inventories in order to reduce oversupply and restore balance to the panel
market."

September pricing for 40- and 42-inch LCD TV panels fell by $10
to $15 on average and was down a smaller 5 percent for 46- and 47-inch panels.

Rates continued to drop in October, though at lower levels, and
U.S. retailers are expected by Black Friday to offer 42-inch LCD TV sets
featuring FullHD and LED technology at less than $400.

Monitor and notebook panels, meanwhile, saw September pricing
fall more moderately (1.7 percent from August for both categories) due to
stronger demand from the corporate market.

Notebook panels, however, continued to struggle as smartphones
and tablets saw gains.

IHS said that as large LCD panel prices continued to fall in
October, they were expected to stabilize in November as production controls
took effect.

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