Over-shipment of large-area LCD panels in Q208 due to an overly optimistic outlook for 2008 was the main factor contributing to the rapid and significant panel price reductions seen in the panel supply chain beginning in June, according to report by the Society for Information Display. The information was taken from a recent research report by Display Search on the Quarterly Large-Area TFT LCD Shipments..

The survey indicates that Q208 shipments of large-area TFT LCD panels grew 6% Q/Q and 23% Y/Y to 117.9 million units, the largest number of large-area panels ever shipped in a quarter. This stuffing of the supply chain and prior overzealous production plans required downstream panel customers to rapidly revise their demand forecast at the end of Q208; the top priority became the adjustment of on-hand inventory vs. increased production. Such mid-year inventory control measures caused a rapid reduction in panel prices beginning in June when panel producers sought to entice additional orders from brands, who already had sufficient supplies on hand.