Warehouses full of LCD TV panels

Samsung LCDOverproduction coupled with lack of demand for LCD TVs could well lead to prices being slashed after this year.

IHS Technology, which tracks the LCD panel market, said that the manufacturers didn’t cut down on output during the second quarter of this year, meaning that by end of this week they’ll have inventories of nearly five weeks.

That could well lead to further decreases in panel prices, said IHS.

Ricky Park, who manages the display tracking at IHS, said: “TV manufacturers purchased too many TV panels in the first half of 2015, anticipating greater consumer demand in the second half of the year. However, due to stagnant growth in the LCD TV market, TV manufacturers are likely to reduce their panel purchases in the second half.”

However, panel makers in China have aggressive production schedules of new generation fabs while some fabrication plants in South Korea and Taiwan have been fully depreciated, said Park, which further lower costs.

Park said: “Increased inventory levels are expected to compel panel makers to accept TV manufacturers’ demands to cut prices.”