The competition is rock hard in the panel industry and is starting to look more and more like the DRAM market. While most are forced to limit their capacity to move up prices artificially, Samsung goes in the opposite direction and continues to cut prices further.
The panel industry like DRAM suffers from too low prices, which is good for the consumer now, but the manufacturers are bleeding and selling at a loss. Several panel manufacturers have been forced to lower production capacity to 70-75% to create a higher demand and raise prices. In September several companies are expected to lower production even further to 50% .
Samsung has instead chosen to go in the opposite direction. Samsung continues with the manufacturing as usual and push prices down, most likely in an attempt to win over customers from competitors that are having a hard time. Prices of larger screens, like TVs are effected by Samsung’s strategy, where the prices of TV panels have dropped 5% with 2-3% on average for the remaining panel types.
Samsung makes hard times tougher for the panel industry.
This is of course good for Samsung and the consumers, but the remaining panel manufacturers are not happy. The screen manufacturers have expressed concern about the rumors of Samsung buy HP’s PC division, which would result in unthinkable consequences according to CMI and AUO.
It is not unlikely that we will see the same thing that happened on the DRAM and harddrive market where several companies merged or were sold off, which has made both RAM and harddrive a commodity where it is impossible for parties to compete with prices.
Source: Digitimes
