Expect slow price declines for notebook LCD panels

Liquid crystal display suppliers are reducing factory utilization rates because of high inventory levels.

By Jim Carbone -- Purchasing, 8/13/2008 11:59:00 AM

Buyers can expect some price erosion for liquid crystal display (LCD) panels used in portable computers, but the price drop will be marginal through the rest of the year.

The average price for an LCD panel used in a notebook computer was $104 in the first quarter. In the fourth quarter, the price will be $102, according to researcher iSuppli in El Segundo, Calif. As demand slows in the first quarter of 2009, the average price will drop to about $97.

LCD suppliers say their prices are close to cost and there is little room for further price declines. In addition many suppliers are reducing production because of higher inventory levels and a decrease in rate of demand.

“Panel buyers are very reluctant to buy panels because they built up LCD inventories earlier in the year,” says Sweta Dash, director LCDs for iSuppli.

Last year, LCD factory utilization rates were about 95%. They have fallen to about 85% because LCD panel demand has not been as strong as suppliers had thought it would be, says Dash.

Also see: LCD market poised for strong growth