With IT (notebook and monitor) panel prices dropping below cash cost, TFT-LCD panel makers are brewing plans to increase prices back to cost levels, while reducing production to stop further losses. Some vendors have agreed to price increases of US$1-2 in order to secure enough orders to replenish their inventory while prices remain low.

Several research firms predicted that IT panel prices would stabilize in the first half of October, while panel makers indicated that they are gearing up for price growth, especially for 20-inch and smaller LCD monitor panels, which have dropped below cash cost. Panel makers planned to increase prices by US$1-2 for 17-, 18.5- and 19-inch products, especially for 17- and 19-inch commercial monitor panels. With recovering demand for commercial monitors, panel prices have recently started to rebound amid limited supply.

For 20-inch and larger monitor panels, price rises will be based on market demand. Possible price rises for some panels in tight supply such as 23.6-inch panels is expected, as 23.6-inch panels can be used for both monitors and TVs. The rise will be at about US$1-2.

Panel makers noted that with limited supply due to lowered utilization rates and low inventory levels, some clients have agreed on the price increases, looking to replenish their inventories while prices are still low.

In terms of LCD TV panels, prices continued to drop in the first half of October due to high inventory levels for LED-backlit models. To secure orders, some panel makers are selling what they have in inventory for the upcoming year-end holiday season. Panel makers expect price drop pressure for LCD TV panels to continue in the fourth quarter of 2010, but will not be as significant as in the third quarter.

Panel makers were able to increase prices for IT panels mainly due to clients replenishing their inventory. But it is uncertain whether panel makers will still be able to continue rising prices when TV panel prices return back to cash cost levels.