Research: LCD panel market continues decline

Recent iSuppli data shows that the market for LCD panels continued to decline through the holiday season, as demand for TVs, notebooks, monitors, and anything with a 10" or larger LCD panel languished.

With declining demand from both the consumer and corporate sectors, LCD manufacturers reduced their production to a fraction of capacity. Hardware analysis firm iSuppli expects that the conditions of the economy will continue to disrupt the LCD supply chain well into 2009, and could have a severe impact on revenue until the market is stabilized.

"Since a strong demand recovery is difficult to mount in the current economic environment," said senior director of LCD research, Sweta Dash, "adjustments must come from the supply side in order to bring the industry back to stabilization. Panel suppliers must cut production and reduce their expansion plans now more than ever to achieve a market recovery."

The analyst firm previously expected a flat growth in 2008 LCD revenue, at around $1.25 billion, but has since reduced its forecast by 8%, making 2008 revenues around 15% lower than 2006.

Companies such as Sony and Panasonic anticipated strong growth in their LCD TV businesses this year, with the former expecting a 70% growth over the 10.6 million units it sold in 2007, and nearly 300% over 2006. Panasonic (formerly Matsushita), likewise, expected a 47% gain over the 3.25 million LCD TVs it sold in 2007, coming from the so-called BRIC countries (Brazil, Russia, India, China).

Vice President of Samsung's display research and development JunHyung Souk, however, expects that the LCD TV market will decline by as much as 40% by 2010.