TFT LCD shortage

DisplaySearch, a research group focussing on display markets, has reported that TFT LCD panels are currently in shortage.

David Hsieh, vice president of the Greater China Market at DisplaySearch, authored a report outlining reasons for a shortage that seems rather surprising given recent economic events.

Hsieh argues that whilst brand and OEMs have reduced inventories, to minimise risk, LCD TV sell-through has remained healthy. In addition panel makers are building to “tolerable” order, meaning that the companies are refusing orders to avoid selling panels at or below build cost.

On the demand side, China’s LCD TV market is booming, partially thanks to a government subsidy and netbooks are proving popular. Furthermore, as the product trend for LCD monitors shifts from 16:10 to 16:9 the component supply chain has struggled to keep up.

Hsieh continued to say that double booking by brands and OEMs, which place the same orders with everyone on their qualified supplier list to ensure allocation, had created an increased sense of tight supply.

He concluded with the news that some brands, OEMs and system integrators only saw the situation getting worse as the economy improved. “Just like stocks, everybody wants to buy at the bottom. As panel prices are still low, orders are rushing into the panel makers,” he commented.