Traditional Peak Season Comes to End, Panel Makers’ Capacity Adjustment is Key to Balance Supply and Demand
According to WitsView’s latest data, MCI rose 75.6 points from 5151.8 points to 5227.4 points from July 29th to September 12th. The U.S. economy shows signs of recovery as BEA revises up the economic growth for Q2, from 4% to 4.2%, which brings optimism to the following two quarters. The consumer confidence index has been rising progressively from the bottom in 2009 and even reached 92.4 points in August, a new high since October 2007. The Beige Book published by Federal Reserve in early September shows the steady growth of the U.S. economy. ECB on September 4th cut interest rate without warning to 0.05%, a rarely-seen low. ECB is forced to take actions as the inflation in the euro zone in August continued to dip to the five-year low 0.3%, and Germany and Italy both suffered from 0.2% quarterly economic contraction, while France showed zero growth, Eurostat indicated.
HSBC’s China manufacturing and service PMI reading in August respectively came to 50.2, declining from 51.7 in the previous month, and 54.1 points, rising from 50 points. The two indicators shows the Chinese economy see both good news and bad news on the path to recovery. The dropping manufacturing PMI implies the slowing domestic demand and the rising services PMI indicates business owners’ confidence in the market. Japan suffered from negative impacts as the GDP growth was revised down from previous -6.8% to -7.1% annually and from -1.7% to -1.8% quarterly by the Cabinet Office on September 8th, suggesting the consumption tax hike causes inevitably influences to the economy. Despite of contraction in Europe and Japan, the micro-stimulus policies in China, the QE in the U.S., and the interest rate cut in Europe will support the sales peak season of the panel industry.
The panel demand and supply remains tight through the end of Q3. According to Witsview’s quarterly sufficiency analysis report, the glut ratio in Q2 was -2.7%, lower than the balance standard 5%, which takes into account demand and regular inventory. The Q3 glut ratio is projected to reach 1.1%, improved from Q2 but staying tight. The panel demand is tight as the LCD TV panel shipment benefits from brands’ promotions during Oct 1st holidays and Single Day November 11 in China and Black Friday in North America.
The strong demand for LCD TV panel constrained the monitor panel capacity, and the monitor panel shipment declined 5.6% MoM, according to WitsView’s July panel shipment report. If the NB panel shipment stays elevated remains to be seen as the replacement of XP operating system and back-to-school sales pause, and the low-price NB buzz cools down.
The tablet freshness wanes, new version of iPad has limited upgrades, and the 7” android tablet prices bottom and see difficulties to go lower. Besides, large-sized iPhone 6 recently released becomes the market’s focus, which would impact the Android camp, leads to soft sales in the smart phone peak season and drags down the smart phone panel demand. As the traditional peak season comes to the end and the issues stimulating demand trim, the Q3 panel demand-and-supply balance relies on the supply side and panel makers’ appropriate capacity control.
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