Price quotes for handset panel modules are expected to drop over 10% in the fourth quarter of 2014 as panel makers from Taiwan, China, Japan and Korea all compete over orders from China.
Handset panel module orders in the fourth quarter are expected to be limited as demand in China has yet to take off as expected mainly due to slower-than-expected development in regards to 4G handset growth in the nation.
Additionally, both vendors and retailers in China are still clearing inventories of 3G handsets as sales have been stagnating following decisions by major China-based telecom providers to end handset purchase subsidies.The subsidies spurred a wave of handset purchasing throughout 2013 and into 2014 and were expected to continue for 4G units. However, most telecom providers have limited or even stopped such moves and have yet to reissue new plans for helping to push 4G handsets in China, leading to lower orders for panel makers than originally expected.
Panel makers including AU Optronics (AUO), Innolux, BOE, Tianma Microelectronics and Japan Display are therefore decreasing quotes during the fourth quarter in order to keep a competitive edge in the market, as well as maintain performances while handset vendors develop newer units and the 4G market is strengthened.
The declining prices are expected to last throughout the quarter and into early 2015, and may continue as China makers will also expand production capacity for handset panel production, leading to increased price wars.
Digitimes Research recently noted in a new report that Taiwan's panel makers will continue to focus on production of a-Si panels for use in handsets to compete in the high-end smartphone panel segment, particularly in the China market. |