Qiu Yubin, WitsView research associate, said that observing the price trend of component parts, the profitability of panel makers is a leading indicator with reference value, and the good and bad profits will reflect the decrease in component prices in the next quarter. When the profit shrinks and operational pressures emerge, panel makers will actively review the cost structure, and in turn, reduce the purchase price of parts and components, which is the most effective and fastest method for improving costs.
Glass substrate Q4 aggravates decline estimate 4-5%
Qiu Yubin pointed out that the main glass substrate in the previous segment was taken as an example. Because some of the panel plant's production rate in the third quarter was revised down, the demand for glass substrates caused a lot of impact. Although the average quarterly drop of glass substrates in the first three quarters of this year was only 1-2%, due to the recent decline in demand and the high inventory levels, there may be a 4-5% decline in single-season prices in the fourth quarter.
The backlight module, which accounts for the highest proportion of the cost of panel materials, due to the hot demand of LED backlighting this year, has led to the price increase of key materials including light guide plates, reflectors, and LED chips, which has resulted in a limited decline in backlight module prices.
LED TV backlight module may drop more than 6%
However, recently, high market sales of LED models have been less than expected, and brand manufacturers have turned to CCFL models with lower panel prices in order to achieve the planned sales target. The market has also seen an increase in CCFL volume while the LED volume has shrunk. This change also makes the backlight module plant pressure to increase prices, the backlight module of the various types of CCFL is expected to have a 4-5% decline in the fall of this quarter, and LED TV backlight module to stimulate more demand, more decline May exceed 6%.
In addition, Qiu Yubin believes that including polarizers, driver ICs, and even liquid crystal panels, the main materials, this quarter to stimulate demand and digest inventory, but also can not escape the problem of price increases. It is estimated that the decline in material costs of the major panel makers in the fourth quarter will have an opportunity to increase from an average of 1-2% in the third quarter to a 3-4% level.
Panel maker profits shrinking and impacting the fourth quarter component prices
In the third quarter, the panel did not flourish during the busy season, causing panel prices of the three major applications to show no small declines. Monitors and notebook PCs have already fallen below the cash cost. The TV panel is relatively good, but it is under the demand for price cuts. , The panel quotes also quickly moved toward the cash cost. Market research firm WitsView pointed out that the shrinking of large-size panel profits and cost protection battles began again. When operational pressures emerged, panel makers adopted more measures to reduce the purchase price of parts and components, which also affected the price trend of component prices in the fourth quarter.