LCD panel factory was ice age cut price cut back funds

Last week, the Taiwan LCD panel factory Hua Ying will close a 4.5 generation panel plant, CMO is about to shut down a generation of the 4 generation line factory. Due to poor shipping season this year, coupled with the global economic crisis, the LCD panel industry will encounter the coldest season in history, called the ice age.

According to the reporter, because the panel price Yixieqianli, handling inventory and cash flow has become a problem of the imminent panel manufacturers. More importantly, in October after the financial crisis led to decline in consumer purchasing power, sales have been identified over Christmas this year, the panel factory shipped this year season is over. Slowdown in market demand led to a decline in orders for the LCD panel business to bring a cold winter.

Panel prices plummeted

Subprime mortgage crisis caused by the reduction in consumer demand is the first time to the LCD panel manufacturers. In June this year, should be in full swing in the sales season, the panel was unexpected demand fell surprise. "Since June is the traditional sales season, may June prices should rise at the same time, in order to cope with the season possible sources of tension, whether manufacturers, channels, or downstream demand side will hold large inventories. However, because the market is not expected to be so large, will naturally bring a sharp decline in prices. China LCD network analyst Zhang Xingang said.

The current price range is very large, 19 inches screen price was $85 a month ago, has now dropped to $65, the 32 inch screen was $220 a month ago, has now dropped to $180. A panel maker told reporters that the price of liquid crystal panel prices will have a serious impact on the production of enterprises.

Capital chain tension

Sharp price decline makes manufacturers frequently hit hard. Some experts said that due to the production of the panel belongs to the capital intensive industries, fixed asset investment is quite large, so when the inventory backlog is too long, the cash flow on the panel will be subject to torture.

Data are expected in the fourth quarter of this year, the global panel shipments will be reduced by 10% compared with the previous quarter, lower than the historical average of 5%. But because the current panel cost and price of more than 85%, regardless of which enterprises will face lower than expected revenue situation, which will affect the confidence of investors, coupled with the economic crisis in such a sensitive period, is likely to cause a profound impact on all panel enterprises.

Taiwan industry gives more detailed forecasts, AUO and Chi Mei optoelectronics next year in the first quarter operating profit is expected to respectively -23% and -33%. If they don't cut back on capital spending, or if they don't update a one-year bond, they are likely to run out of cash in the second quarter of next year or in the third quarter.

Reduction of price

Insiders told reporters that due to the sharp decline in market demand in Europe and the United States, domestic manufacturers are difficult to be affected, the BOE announced that the three quarter is expected to be a loss. As the BOE panel 80% for export, it will inevitably be affected by the economic downturn in foreign countries. "Securities analysts said, there is a panel manufacturers panel manufacturers in Taiwan or in the mainland, are eyeing the mainland market, the mainland market more competitive, used to be a piece of cake for five people, has now become the ten person". Affected by the economic crisis, the traditional consumer city - Europe and the United States, Japan and South Korea market is generally weak, while China's LCD market growth is much higher than other regions. LCD TV at least 50% of this year's rise is a relatively large market growth, so the global LCD panel manufacturers will focus on china. A color TV brand marketing department said.

Increased competition in the domestic market, the panel can only be reduced by degrees. According to informed sources told reporters that the current domestic panel manufacturers a monthly output of at least 50% of the magnitude. In addition to production, the price of return of funds has become one of the means, after two months of digestion, there are currently about 30% of the inventory has been consumed. Market forecast, starting from the fourth quarter of this year, the first LCD panel manufacturers will be a loss, then in addition to cut, cut wages and other means of self-help, layoffs may become a helpless choice.