Panel makers' inventory levels return to good bill of health -

Panel makers' inventory levels returned to a good bill of health at the end of December according to a report by DisplaySearch.

The MarketWise-LCD Industry Dynamics report said this eliminated concerns over excess inventories in the previous two months.

On average, TFT LCD inventories, defined as finished modules held by panel makers, are down to 7-8 days for TV panels, 6-7 days for monitor panels and 5-7 days for notebook PC panels, which the company claims are are all manageable levels for panel makers.

In addition, it said panel prices, especially LCD TV, are stabilising because there is little inventory pressure pushing panel prices down. Within this are LCD module stocks not booked by customers and kept in panel makers’ premises.

However, as always there are concerns, this time about high inventory for brands. DisplaySearch found that TV, monitor and notebook PC brands are holding medium (4-5 weeks) to high (more than 6 weeks) supply chain inventories. It said this went along way in explaining the brands’ restrained production plans in the first quarter of 2011.

Across the pond, US Q4 sales in 2010 were claimed to be "positive", especially for
CCFL models. However, not every brand was seeing that success, with some facing high inventories for LED-backlit LCD TV models.

DisplaySearch said that in the first quarter of this year brands will therefore put more focus on pushing LED-backlit LCD TVs before the brand spanking new models take over in March.

In China, the fair sell-through during the holidays helped to lessen inventory pressures by the end of December. As a result, DisplaySearch said the LCD TV inventory would fall to medium to high levels by the end of December.

Deborah Yang, Research Director at DisplaySearch, said: “With the strong production in Q4'10, we estimate Chinese TV brands were still carrying extra set inventories at the end of 2010, and some of that is for the upcoming Chinese New Year. In Europe, sales have TV brands worried, so the brands’ inventory will still be a concern in Q1’11.”

Other findings from the report also found that LCD TV panel shipments to China are forecast to fall from 15 million units in Q4’10 to 13 million units in Q1’1l, while poor Chimei Innolux is expected to lose market share from Q4’10 to Q1’11.

The top five notebook PC OEMs will also decrease production in January by 2 percent on a month by month basis to 13.7 million. In February, they plan to reduce production to 11.2 million before the production rebounds to 15 million in March 2011.