Display market must step cautiously about backlit LED TVs -

Although some are claiming that the LED backlit market is rosy, analysts have warned that manufacturers must be cautious.

They have warned that the success of this market next year depends on "LED backlit TV set price reductions."

Epistar claimed that LED-backlit TV market penetration would increase to 40 percent in 2011 from 20 percent in 2010. It said it planned to ramp up capacity by 30 percent in 2011 after already raising its capacity by 30-40 percent in 2010.

Company president MJ Jou said that the upstream material shortage was the most serious in the third quarter, but due to seasonal impacts and material suppliers' new capacity going online, tight supply should begin to ease in November and December.

Goksen Sertler, senior TV analyst at Meko, warned that the LED market could have a tough year as competition heats up and old stock remains due to high prices.

She told TechEye: "According to Meko's forecast for the EMEA LCD TV market, LED backlit LCD TVs will account for 19.8 percent of the EMEA TV market in 2010. In 2011, we expect LED to account for 45 percent in the EMEA market.

"Obviously European customers can afford TV sets with relatively higher price therefore Europe's penetration 45 percent could be slightly higher than Epistar's expectations.

"However we believe the rest of 2010 could very tough. There is still huge stock in TV brands. LED TV prices are still too high. Even though TV brands are reducing the LED backlit TV prices, stock is moving to customers very slowly."

She added that Meko expects very aggressive price reductions in LED backlit LCD TV sets during the fourth quarter.

"We would also warn TV brands and panel makers about keeping huge stocks of LED backlit LCD TV sets in the rest of 2010. In 2011 the success of LED is dependent on the LED backlit TV sets price reductions - therefore panel makers could be under great pressure for LED backlit panel prices.

Another analyst agreed: "Companies must not count their chickens before they hatch," he told TechEye.

"The backlit LED market is a dangerous one at the moment and will continue to be so until manufacturers lower their prices and shift old stock. Only then will they be able to start looking at moving forwards."