Market Trend

Between April 13, 2009 and April 24,2009, the MCI index surged further from 5503.8 to 5698.0, up by 194.2 points. As of April 24, the MCI index was now 302 points away from the 6000 level, which would mark an improvement from WitsView’s “Very Low Market Confidence” to “Low”. However, for this to occur, notable improvements will need to be seen in the still uncertain end market demand. Although AUO, LGD and Samsung, who have already held their 1Q09 inventor conferences, appear upbeat toward the forthcoming panel demand, WitsView holds a more cautious outlook.

Aside from the still relatively weak global economy factor, Taiwan panel makers are rapidly increasing their utilization rates, and there are new production lines scheduled to come online in 2Q09. It thus remains to be seen whether the end market can consume all the production capacity. The best scenario would be demand from the major markets indeed picks up, along with the global economy. This would certainly create a strong incentive for the MCI to rise past 6000. A still satisfactory setting is although the demand from key regions does not see a big improvement, China’s electronic product subsidy program for rural areas can offset this impact. The likelihood of seeing the MCI index surging past 6000 is still possible. The worst case scenario is major markets experience flagging consumer spending and China’s subsidy program fails to spur the original anticipated market demand. This would definitely deal a significant blow to the MCI’s advancement.