The main reason why LCD panels have not been profitable for so long is that the market is in an extreme state of oversupply, which causes the price of liquid crystal panels to be lower than the production cost. However, manufacturers reduced production and reduced capacity utilization, coupled with better-than-expected demand for panels in the Chinese TV market, helped the industry return to profitability in the third quarter.
The shortage of glass used to make LCD panels is also a factor in the tight supply of the panel market in the third quarter, which further increases prices and profits.
According to preliminary estimates released by iSuppli, global shipments of large-size LCD panels reached 148.3 million units in the third quarter, up 14.3% from the second quarter of 2009 and 28.9% from the third quarter of 2008. iSuppli expects that with More companies report third-quarter results and may need to correct their original forecasts.
In the second quarter of 2009, LG Display was the world's largest manufacturer of large-size LCD panels with a shipment share of 25.3%. This gives LG Electronics a little ahead of its main competitor Samsung, which has a 24.6% share. Although iSuppli The LCD market share in the third quarter has not yet been determined, but initial indications are that LG Electronics and Samsung will be in the third quarter.
The increase in plant capacity utilization and the decline in demand for panels after the Christmas shopping season will drive oversupply in the large-size LCD panel market in the fourth quarter of 2009, in line with the normal seasonal pattern. However, compared with the fourth quarter of 2008, prices and shipments in the fourth quarter of this year will only decline moderately. Many panel suppliers have just returned to profitability and are still strictly controlling inventory, and there is currently no intention to significantly reduce prices.
The large-size LCD panel defined by iSuppli is a panel with a diagonal size of 10 inches or more.
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