Double Whammy for LCD monitor prices in Q2'11

While the desktop monitor market is far from the booming market that it once was, it is still a very big market. Although it is mature, it is not immune assigned to the challenges associated with high-volume, commodity purchasing big ticket. Desktop displays are bundles between a rock and a hard place with the upgrade cycle of CRT to LCD caught essentially completed around the world, and with little demand for multi-monitor use, notebook / monitor and standard-of- Latitude Upgrades generated. Monitors are very necessary in the overall computing landscape and still are a great source of TFT-LCD demand, but they have lost control over their cost structure. Supply and demand dynamics for LCD TV panels have the greatest impact on LCD monitor prices and demand for PCs with integrated displays (such as tablets, notebooks, netbooks and AIOs) relates to both the long-term prospects for desktop display and the near- term prices for panels.

LCD panel makers are currently negotiating to increase the prices to bring them back in the black. Our analysis shows that many panel makers were in the red in 2H'10 need to do operation and to increase the prices to move back into the black. But in a negotiating ploy to get well to the buy side, increases in the plate with the price refers to the recent events in Japan. This gives many brands under the impression that panel makers are to a natural disaster as an excuse for the prizes without any concrete evidence that the supply was to increase negatively affected. The price increases are contingent on the disasters in Japan, but not related, so it is hard for many to dissociate the two.

Regardless of the increase in LCD-monitor panel pricing is a new variable in OEM module for desktop monitors and notebook computers. OEM's contract manufacturers are now pushing to increase its prices to major brands, cited rising costs of logistics, material and labor costs. In the past, OEMs build only one monitor offer project based on solid LOP (labor, expenses and profit) prices, although these prices can vary greatly depending on variables such as the cost of oil for shipping. The rising cost of oil affects are made from oil, such as plastics, according to the Quarterly LCD Monitor Cost and Price Forecast Model, can change the plastic parts of an LCD monitor for 4-5% of the total monitor FOB price to components.

Perhaps the most important aspect is the LOP increase in labor costs in 2010 incurred but not yet together, led to brands. Foxconn (Hon Hai) significantly increased the wages of workers in 2010 in part by the negative press about their working conditions. Most major Taiwan OEM Foxconn followed in increasing worker productivity compensation to remain competitive and retain workers. The result of this rise in labor costs will go now likely to end markets through brands.
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