Market Trend

According to the latest survey by WitsView, a research division of TrendForce, the MCI index slumped by 531.9 points to 4829.5 points between June 14, 2011 to July 11, 2011. The index fell below both the monthly and quarterly moving averages, an indication of the very downbeat outlook towards the TFT-LCD industry. The negative sentiment can be summarized into the following points. First, global markets continue to be affected by the Europe credit crisis. Second, the weak US economy and global inflationary problems continue to weigh on consumer buying at the end market. Third, due to the quarterly and half-year accounting end in Jun11, it caused downstream clients to strictly control their overall inventory. Meanwhile, according to WitsView’s 3Q11 panel shipment growth forecast, it is projected to increase by a mere 3~5% QoQ. Needless to say, despite the upcoming traditional hot seasonality, downstream clients are maintaining a very passive approach toward their panel inventory pull-in. In general, if panel makers are unable to effectively lower their respective utilization rates in 3Q11 to ease the current oversupply conditions, the traditional hot seasonality in 3Q11 may instead become a “weak seasonality”. These negative impacts attributed to the huge decline of the MCI index over the past month.