Market Trend

According to the statistics of latest research by WitsView, MCI index has dropped by 706.3 points from 4569.7 points to 3862.9 points during the time period of 7/14~8/12. This is mainly due to the huge impacts on Global financial markets and corporate and consumers confidences caused by the degraded US credit rating. On 8/8 MCI index dropped by as much as 4.75%. Debt crisis in Europe and US is not only an indication of government failure, but also a huge impact on the prosperities of global economy and industrial chains. Suppressed by slow economic recovery, high unemployment rate and inflation issue, market demands for LCD TV, LCD monitor and Notebook PC appear to be weak such that the visibility of hot season demand in the second half of the year remains ambiguous.

Panel makers have already disclosed their financial reports of second quarter. As compared to Korean panel makers, the financial reports of Taiwanese panel makers have been disappointing with significant issues in various aspects such as customer structure, product combination, cost advantage and production capacity modification. Korean panel makers enjoy the advantage of supports from own brands over Taiwanese panel makers such that they can maintain normal production line operation and obtain cost advantages through modification of transaction approaches within own business groups. China’s autonomy in TFT-LCD industry has been growing, with BOE, TCL and C-Panda all jumping into the production of large-sized panels. Therefore it is going to be a three-way battle for global market among Taiwanese, Korean and Chinese panel makers. Facing the environment with long term pressure of over-supply in the future, panel makers must adopt flexible production modification strategies in order to maintain balanced supply-demand market status. Panel prices have been dropping again in July and August due to factors such as weak demand, inventory adjustment and over-supply. All aforementioned negative factors have led to recent huge decline of MCI index.