TAIPEI, TAIWAN: During the end of April, panel makers subsequently released their first quarter earnings report. Despite the traditionally slow season, both Samsung and LG Display were still able to slightly increase their respective operating margins.

Meanwhile, aside from AUO, who maintained an OP margin of 22 percent (same as in 4Q07), the remaining makers all registered a decline. Nevertheless, from an industry-wide viewpoint, the average ratio still exceeded 15 percent.

"Although the weak seasonality generally impacted the end market demand, monitor and NB panel shipments continued to increase, which were up respectively by 1.1 percent and 1.4 percent QoQ. The increase stemmed from downstream clients’ earlier inventory build up, due to a possible panel price rise in 2Q08. Separately, the TV panel segment was more seriously affected by the seasonal cycle, as shipments declined sequentially by 10%. But thanks to the ongoing product design changes, which helped further lower the production costs, along with adjustments in the product mix, panel makers still managed to retain a certain profit level amid the falling ASP," said WitsView analysts.

As the market enters into May, there is an air of uncertainty. With the slow season still present and global economy unstable, the TV end market demand remains sluggish. Thus, although monitor panel prices began rising in April, the increase was moderate. In May, the pace in the price increase will be similar.

In the NB segment, given the downstream clients’ sufficient inventory levels and some of the shipments constrained by the shortage of relevant components, there is no pressing need to purchase additional panels. Although panel makers are trying to slightly raise the NB panel prices, the major NB brand vendors are still very resistant. Thus, prices are expected to basically stay flat in May.

Finally, due to the traditional weak seasonality, the panel and TV set inventory levels in the China region are still high. As both the local and international TV brand vendors launch a new sales promotion during China’s four-day labor holidays, hopefully, it will consume some of the panels in stock. In addition, as the tier-1 brand vendors are also set to launch a new price war in the North America market, it should help boost the overall demand after mid-May. For the time being, the panel price pressure will still be large, especially for the above 40” segment.