Due to LCD (Liquid Crystal Display) TV panel oversupply, LCD TV prices have been falling continually, and excessive inventories as well as consumers' wait-and see attitude began haunting the Taiwanese LCD TV makers at the start of the second quarter of 2004. The persistence of such negative impacts curbed third quarter shipment growth, and orders did not see an increase until the end of the third quarter, when the prices of LCD TV panels, after falling for two straight quarters, narrowed the price gap with CRT (Cathode Ray Tube) TVs. Market demand for LCD TVs consequently swelled from the contracting price difference, reflecting effects of the busy sales season on fourth quarter shipments. As a result, Taiwanese LCD TV shipment volume reached a little more than 400,000 units in the third quarter of 2004, posting just a slight sequential increase, while shipments in the fourth quarter marked a substantial 40% sequential growth to reach over 570,000 units.
The multitude of Taiwanese LCD TV makers has been adding to the industry's intensifying competition. Prices for LCD TVs have been revised down constantly as makers strive for more orders and to stimulate demand. ASP (Average Selling Price) in the third quarter broke through the US$600 mark, while shipment value slipped to just US$200 million. In the fourth quarter of 2004, however, significant increases in the shipment share of LCD TVs 26" and larger were able to offset falling TV prices. ASP in the fourth quarter thus only dropped around US$20; shipment value was also able to exceeded US$300 million.
Taiwanese branded makers successively rolled out new LCD TV models in the fourth quarter. This enabled Taiwanese branded shipments to account for over 15% of total shipment volume in the second half of 2004. Nonetheless, with an influx of orders from Japanese brand-name vendors and channel players in Europe and the US, OEM/ODM (Original Equipment Manufacturing/ Original Design Manufacturing) production remained the major driver of shipment growth in the second half of 2004, attributing to more than 80% of overall shipments.
Looking towards the first quarter of 2005, should there remain an oversupply of LCD TV panels, consequent fluctuations in panel prices may yet spur demand for LCD TVs. However, the wait-and-see attitude among consumers may again take form, curtailing 2005 shipment growth. Despite this possiblity, mass production on Taiwanese makers' new generation panel lines is expected to boost the shipment volume for 32" and 37" LCD TV panels, and bring in more orders for larger size LCD TVs. Thus in 2005, shipment volume of the Taiwanese LCD TV industry is forecasted to double what was achieved in 2004.
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