LCD panel manufacturers expect panel prices to rebound to cash cost levels in February 2009.

The optimistic forecast has been attributed to falling inventory levels and a projected increase in orders. In addition, second-tier system manufacturers could agree to a price increase for monitors and notebook panels by mid-January 2009. However, first-tier system makers are unlikely to accept a price hike until February.

Meanwhile, global inventory LCD monitor inventory levels dropped to approximately 4.5 million units in November and are expected to plummet to 2.5 in December. If not replenished, inventory levels could reach record lows of 100,000-200,000 units by January 2009. A similiar fate is expected for notebook panels, which posted four million units in November. December inventory is projected to drop to 2.5 million units and could reach zero if production has not increased by January 2009.

As IT Examiner previously reported, Taipei recently announced its intention to bail out the island's failing LCD sector.

Taiwan's premier, Liu Chao-shiuan, termed the LCD panel industry a "strategic industry" and pledged to support it during the global economic recession. "We will help the industry as much as possible. I hope the government supports the industry and the industry supports its employees," said Liu.

It should be noted that Liu recently met with CMO (Chi Mei Optoelectronics) founder Hsu Wen-long and company president Jau-Yang Ho. Nevertheless, Ho claimed that their discussion did not include any mention of bailouts, consolidation or mergers. Ho also clarified that CMO had no current plans for consolidations or mergers, but was willing to cooperate with other players in the LCD panel industry.

AU Optronics also confirmed that it was keeping its options open. "We're very open to any proposals or suggestions on how to further improve things at the company and within the industry," said a company spokesperson.

Analysts have long expected large-size LCD panel shipments to plummet in the fourth quarter after decreasing 2.4 per cent during the third quarter. X

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