Reality Finally Setting in for LCD Panel Makers
By William Trent, CFA of Stock Market Beat
After repeatedly insisting that things were going to be fine by August, LCD panel makers now appear to be accepting the reality: they have been making too damn many panels and it is going to hurt their profitability at least through the remainder of the year. Now maybe they will work to reign in production so the stock prices can bottom.Global LCD-TV panel inventory to reach 15m units in 2006
TFT-LCD panel makers are expected to suffer from serious inventory issues throughout this year, with LCD-TV panel inventory likely to reach 15 million units in 2006, according to estimates from Taiwan-based panel makers.
The global supply for LCD-TV panels will total 55 million units in 2006, while worldwide demand for LCD TVs will only attain 40 million units, Taiwan-based panel makers noted.
Although demand will pick up during the second half, amid strong seasonality, the oversupply of panels will still drag down panel makers’ profitability, sources indicated.
Currently, with the exception of Samsung Electronics, such panel makers as LG.Philips LCD, Chi Mei Optoelectronics (CMO), Quanta Display (QDI) and Chunghwa Picture Tubes (CPT) are all facing LCD-TV inventory problems, sources at the Taiwan-based panel makers pointed out. Sources at the Korea-based panel makers even indicated that CMO is seeing its 32-inch LCD-TV panel inventory level increase to about one month, while LG.Philips LCD also has its 37-inch LCD-TV panels piling up.
http://stockmarketbeat.com/blog1/
After repeatedly insisting that things were going to be fine by August, LCD panel makers now appear to be accepting the reality: they have been making too damn many panels and it is going to hurt their profitability at least through the remainder of the year. Now maybe they will work to reign in production so the stock prices can bottom.Global LCD-TV panel inventory to reach 15m units in 2006
TFT-LCD panel makers are expected to suffer from serious inventory issues throughout this year, with LCD-TV panel inventory likely to reach 15 million units in 2006, according to estimates from Taiwan-based panel makers.
The global supply for LCD-TV panels will total 55 million units in 2006, while worldwide demand for LCD TVs will only attain 40 million units, Taiwan-based panel makers noted.
Although demand will pick up during the second half, amid strong seasonality, the oversupply of panels will still drag down panel makers’ profitability, sources indicated.
Currently, with the exception of Samsung Electronics, such panel makers as LG.Philips LCD, Chi Mei Optoelectronics (CMO), Quanta Display (QDI) and Chunghwa Picture Tubes (CPT) are all facing LCD-TV inventory problems, sources at the Taiwan-based panel makers pointed out. Sources at the Korea-based panel makers even indicated that CMO is seeing its 32-inch LCD-TV panel inventory level increase to about one month, while LG.Philips LCD also has its 37-inch LCD-TV panels piling up.
http://stockmarketbeat.com/blog1/
posted by douglas mcintyre at 11:57 AM
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