Slumping World Wide LCD TV sales triggering an industrial realignment
Many market research firms including U.S. market research firm DisplaySearch believe the reason behind slumping LCD TV sales is due to huge LCD panel oversupply causing declining LCD panel prices. The drop in prices has a ripple effect which bonds to hurt the parts and component manufactures of LDC panel TV such as those of color filters, glass substrates etc. Flat panel TVs has only 30 to 40% share of all the TV shipments to emerging economies, even in developed countries only less than half of the households own such models. Although the general expectation is toward profitability and growth in 2010 the growth rate will not be in the same magnitude that was seen in 2007. As a result the manufacturers of LCD TVs and parts and components are making every effort to survive the market slump. Sony has already announced the closure of its U.S. plant in late March and Nitto Denko Corp. has abolished its policy of not accepting customers’ demands for price reduction on optical films which are being used in LCD panels in an effort to maintain market and high plant capacity utilization rates. These types of moves will have impact on other manufacturers in LCD business with likely result of industrial realignment for year 2009.