TFT LCD panel makers from South Korea and Taiwan will begin announcing third-quarter results this week, with LG Display kicking off on October 21, AU Optronics (AUO) on October 27 and China Picture Tubes (CPT) on October 29. The panel makers are expected to report quarterly decline in profitability due to lower than expected sales during what traditionally is the high season.

Panel prices in the third quarter fell substantially, and some IT panels dropped below cost. Panel makers adjusted capacity utilization to control volume hoping to buoy prices. First-tier Taiwan-based panel makers reduced their utilization to about 60-70%, and second-tier players such as CPT and Hannstar Display, which turned in losses in the second quarter, could see their losses widen in the third quarter.

TV panel prices remained above cost in the third quarter, and hence panel makes with TV panels as their focus could still see profits. Though South Korean manufacturers have advantages in pricing and product mix, they will still be affected by the overall economy and market demand, so their third-quarter profitability should see significant sequential declines. Taiwan's AUO had previously released a profitability warning, and analyst projections range from a small loss to a small profit for the third quarter.

Though some IT panel prices have rebounded by US$1-2 in the fourth quarter, analysts believe complete recovery will take time and more negotiation between suppliers and customers. For TV panels, price declines will continue in the fourth quarter, but the slide should be much tamer.The fourth quarter could be the weakest period of 2010 in profitability for panel makers.