Austin, Tex. January LCD monitor production for top PC and monitor brands, which is about 85 percent of the market, was 12.5 million units, the highest level in more than a year, according to a new report from DisplaySearch. The market researcher says it’s too early to determine if it indicates a recovery or double booking in anticipation of panel price increases.
The report also finds that near-term production build plans show that March could be the highest monthly production of LCD monitors on record, reaching over 12.9 million units.
“In today’s volatile PC market, OEM and brand production totals are a leading indicators as to what the market may see in the near term, including pricing and supplies,” said Chris Connery, vice president of Personal Computer Displays at DisplaySearch, in a statement.
The report, “Monthly Desktop Monitor Brand and OEM Production Report,” indicates that it is too early to attribute the higher production levels to an increase in end-market demand. “Many other factors need to be considered alongside of actual production to get a true sense of the market,” said Connery.
Another factor includes continued strong demand for 19-24-inch LCD TV panels, which impact the supply of similarly-sized PC displays and can cause pricing for these panels to rise amid shortages, says DisplaySearch.
According to the market researcher, the threat of increased panel pricing has historically caused monitor companies to pull-in or double-book orders to receive allocation prior to price hikes. A pull-in of production without increased end-market demand can set the stage for high inventories, says Connery.
Another finding shows that in China, which has become one of the largest consuming regions for monitors, end-market demand for LCD monitors is not very strong in the first quarter of 2010, but production requests from the major players in the China market are still strong, with many looking to stock up for the Chinese New Year.
In addition, a growing dominance of notebook PCs, which outpaced desktop PC shipments for the first time in 2009, calls into question where the increased demand for external, larger-size displays is coming from, says DisplaySearch.
The findings indicate the use of LCD technology in desktop monitor displays and in all-in-one desktop PCs is still one of the top markets for large-area LCDs, says DisplaySearch.
The fast-paced nature of the market and its inter-dependence on other markets such as notebook PCs and TVs, which compete for the same panel production, now requires that brands and their OEM production partners track production on a monthly basis, says DisplaySearch. Otherwise, they can get caught short on supply or end up spending too much on panels in a supply-constrained situation, according to the researcher.