Highlights:

TV panel price decreases 2-3% in average in first quarter, and still have price pressure.

　　The average contract price of TV panel slides in 1H April, with US$4 price drop in average. Considering the first quarter is usually a demand-low season, the price of LCD TV panel has dropped 2-3% in the first quarter. Because retailers want to decrease retail prices of LCD TVs, we expect that TV panel price trend is downward this year.
　　For each sector, excess supply of large-sized panel still remains and seasonal weak makes price pressure heavy. Panel makers are trying to cut the panel prices to stimulate more demand. 32-inch and 37-inch TV panels' supply market is quite in balance. Price pressure existed in 1Q, about 2% price drop. In second quarter, TV market is still in low season. We believe that price-cutting for 40-inch and above sized TV will continue to boost more sales.

Due to traditional slow season, notebook panel prices keep to decrease in 1H April.

　　Monitor panel contract price keeps stable in 1H April, while notebook-used panel price has 1% price decrease in 12-inch, 14.1-inch, 15.4-inch, and 17-inch. According to last three month price quotes, the prices of monitor and notebook panels dropped 5-8% in the first quarter. Because the supply base for monitor panel is limited, prices keep stable at this time. Notebook panels, however, affected by weak demand, it is expected that price pressure will continue until May.

Though Beijing Olympic Game will inject more demand on LCD TVs, slow U.S economy and capacity expansion will be concerns of oversupply this year.

　　This summer, Beijing Olympic Games's coming is expected to fuel demand for thinner TVs. With Olympic Game's inspiration, LCD TV demand is likely to explode ahead and TV panel prices may have a short-term rebound. However, the slowing U.S. economy and the expansion of capacity are concerns as they will cause an oversupply problem in the industry. U.S market is the world's top IT and consumer electronics market. The economic problem in U.S may decrease will of consuming this year. inSpectrum expects the market will tend to oversupply late of this year, but the scale of excess will be less than year 2006.