As we have noted, now on three separate occasions, Samsung’s (005930.KS) line of Mini-LED/QD TVs has been the focus of discounting, despite the fact that the product line has only been available for a few weeks.  The new sets were announced on January 6, but were not in consumer’s hands until March 16, at least some were, with the rest becoming available in the US in May and June.  On 5/20, 6/2, and 6/24 we noted that Samsung has been discounting various sets in the 32 model line, and has now added more sets to the list of discounted items.
With this last set of price changes which occurred on Saturday, 23 of the 32 models (71.9%) have been discounted at least once, while 11 (28.1%) have been discounted twice, and 3 (9.4%) have been discounted three times., and the average discount among the Mini-LED TVs is now 15.5% (up from 14.9% last week) from their original prices, while those that are QD only have seen an average discount of 9.4% (up from 7.5% last week).
As we have noted previously, we believe the reason that Samsung is being so aggressive on pricing with this new TV line is that it was overpriced from the beginning.  Samsung typically gets a bit of a premium for its sets, perhaps not quite as much as Sony (SNE), but more than its Chinese brand competitors.  Since this is technically Samsung’s first shot at a full Mini-LED/QD line, they had no way to gauge where consumers would buy, and took a shot with higher prices.  We expect as the quarter progressed, Samsung discovered that sales were not quite as robust as expected and began the process of offering discounts, and as we get closer to the end of the quarter, those discounts get closer together and a bit more aggressive in order to book as many units as possible.
As Chinese TV brand TCL (000100.CH) was the first to offer a mini-LED TV to retail customers, and is already on their 3rd iteration, and typically Chinese brands tend to be lower priced than those from South Korea.  In order to illustrate how far apart pricing between Samsung’s Mini/QD line and TCL’s, we offer the table below which compares TCL’s current offerings with those of Samsung.  We note that absolute comparisons are not possible as each model has a variety of features and specifications, but at least from the standpoint of the sets being at a minimum of 4K and containing both Mini-LED backlights and quantum dot enhancement, the comparisons are similar.  While TCL only offers single models of each, Samsung offers two price points, both of which we list, along with Samsung’s original and current prices, and the premium associated with Samsung’s current prices over TCL.

Leakers are a big part of the CE sub-culture and social media has made that practice one that can transform a CE geek into an influencer almost overnight.  By revealing a tidbit about a global product, whether right or wrong, a leaker can generate hundreds of thousands of followers and generate substantial income.  In some cases this can help the leaker to gain more contacts at low or mid-level suppliers who are willing to drop more hints under the cloak of unnamed ‘industry sources.’  Since there is no way to fact check a leak until the product is actually released, leakers can self-perpetuate themselves for long periods, and quickly reinvent themselves with new leaks when products are actually released, regardless of whether they were correct.
Some companies use this channel for their own ends, either planting information that will generate positive enthusiasm for an upcoming product or to show how well the new product will compare with the competition, while others are particularly secretive, and do not intentionally ‘pre-release’ information about their products.  Of course, given the vast numbers of companies in the CE supply chain, there are always little bits of information that slip out, but a number of large CR product firms require NDAs to be signed  and can inflict penalties on those companies when violated.
Apple is one of those companies that tends to insist on compliance with its rules on secrecy as it is very focused on keeping it product development plans under wraps.  NDAs are a way of life for Apple suppliers and comments by supplier staff or officials about any product plans that Apple might have are met with legal representation, however the internet is the Wild West as to 1st Amendment rights and there is little that can be done to keep leakers from dropping hints or making claims as to product plans or features.
That said, Apple is pissed and is looking to put it finger in the leaky dike that is the internet, with a number of Apple leakers leaking the fact that they have received ‘notice’ from Apple’s legal counsel cautioning them  about disclosing information about unreleased Apple products.  While the notice did not portend legal action, it did note that such information may be from competitors and inaccurate, therefore hurting both the company and its customers, with screenshots of leaker blogs and comments.  As the leakers become more bold, with some purporting to know “exactly what Apple is working on, to the tee” (Kang) and showing track records for correct leaks, Apple seems to be a bit more aggressive in trying to protect its product security, and rumors that Apple itself conducted a ‘sting’ in March by planting misinformation to see who leaked it and track back the sources.  A number of prominent leakers were identified by that sting (unverified).
Whether this represents a new normal for Apple or just an attempt to periodically reduce leaks, Apple will have to walk a fine line here as the influence that leakers have over the masses of fans that are the ultimate buyers of CE products is obvious, and the fact that free speech relative to the internet is still a bit of a gray area, may make this a difficult line to walk for Apple and any others who might be concerned about such security issues.  Its not as easy to scare someone with a lawyer’s letter when they have 500,000 followers and can move them away from a product with a short Tweet.

​In 2015 the Indian government was said to have contacted a number of LCD panel producers under the auspices the 2014 “Made in India” plan, trying to convince them to build LCD panel production fabs in the country.  However after evaluation, panel producers were not convinced that India could support such facilities and the projects were never developed.  The government was successful in convincing Apple (AAPL) that the country would provide cash subsidies and tax breaks if it set up production in India, and while Apple itself does not a named factory in India, it was in part the reason for Apple’s key assembler, Foxconn (2354.TT) to begin operation in the country, along with a number of other component feeder companies and OEMs.
One of the problems that has faced CE companies that have set up production in India is the relatively low productivity of its workforce, which has been estimated to be ~60% of the productivity of an equivalent line in China.  That said, the cost of those workers in India is an amazing 33% of the cost of workers in China, making production in India a ‘value’ proposition.  Such a model is better suited for assembly, where significant manual labor is involved but is still limiting for manufacturing situations that need highly skilled workers, such as panel production, and opportunities for education to bring workers up to the necessary skill level are also limited.
While the India government is will to subsidize panel production in the country there does not seem to be a company in India willing to become the leader in the LCD space as a company known as SVA did in China, a company that owned a TV factory in Shanghai.  SVA convinced NEC (6701.JP) to invest part of the cost to build a Gen 5.5 LCD fab, however the fab and most of the components and materials came from Japan, producing profits for NEC and its parent Sumitomo Chemical (4005.CH) but losses for SVA, which eventually declared bankruptcy.  Chinese companies in the CE space tend to work for lower margins than companies outside of the Mainland, which gives them the ability to dominate their industries but little room for margin expansion, however the recent rise in LCD panel prices has encouraged panel producers to believe that a new era has begun, one where they can continue to increase profit margins.
Whether that is the case is up for discussion, but the Chinese display industry has built itself a robust supply chain, making it more difficult for it to be replaced, at least at the panel production level, and India remains unable to attract display production investment from current producers, even with the promise of subsidies.  While few expected Japan to ever be displaced from being the leader in the display space many years ago, and South Korea the same, while India might not be ready to step forward as the next migration for panel producers, China is not impervious to those changes and should never assume that it holds a guarantee on the display space.  India might not be ready yet, but it has a growing population and growing demand.  It just needs someone to the ‘chicken’ to the display industry’s ‘egg’, to begin such a transition.

For the Month of May large panel LCD sales rose 4.4% m/m and are up 55.5% y/y.  Large panel LCD shipments declined by 0.3% but are up 2.7% y/y.  Among panel producers there were some standouts in May, with AU Optronics (AUOTY) seeing a 10.7% jump (m/m) in sales, and both HKC (248.HK) and CHOT (pvt) seeing a 13% m/m increase in sales, however larger players, such as BOE (200725.CH) and LG Display (LPL) were flat and up 4.3% respectively, weighing a bit on the totals.  Samsung Display (pvt) was flat for the month but is operating only one large panel LCD fab currently. 
Large panel unit volumes have been relatively flat this year, with only a 2.6% spread between high and low, excluding the one month unit volume spike in March, which increased the spread to 8.5%, however sales have increased 12.9% across the industry, with rising panel prices accounting for much of the sales outperformance.   In Fig. 1 we show large panel unit shipments, and while the scales are not the same for both, it does illustrate that sales are becoming increasingly dependent on price increases this year, which is further illustrated in Fig. 2 which shows that price and sales trend lines are converging. 
We note that 2H shipments are typically 13.0% (5 yr. avg.) higher than 1H, although removing 2020 (COVID-19) brings the average down to 10.2%, so one would assume that large panel sales will increase in 2H by considerably more than that amount, making the assumption that large panel prices continue to rise.   While we do expect large panel prices to continue to rise into 3Q, we believe the rate of increase is slowing as demand, particularly for TV slows in North America and China.  Fig. 3 shows TV panel pricing and ROC, with the ROC trending down and actual aggregate pricing falling below the trend line.  We expect that lower panel pricing ROC trend to continue in 3Q as demand for TV slows and demand for IT products levels off.  While there will be short-term anomalies, we expect that trend to continue through the end of the year.

We have noted that Samsung’s (005930.KS) Mini-LED/Quantum Dot TV line struck us as being a bit on the expensive side, especially when compared to TCL’s (000100.CH) Mini-LED TV line, but apples-to-apples comparisons are hard to make given the number of features available to each model.  That said, we have also noted that Samsung has already begun to discount a portion of the new TV line, and in some cases more than once, with the most recent reductions being during the last 24 hours.  While this is a bit unusual given that a number of the sets have only been available for a few weeks and display and component costs have been rising quickly, the fact that Samsung has been so aggressive toward TV pricing would indicate that they priced the new line too high and that they are searching for price points where the new models become more attractive to consumers.
The discounts vary across the line but of the 32 models in the 2021 offering, 18 (56.25%) have seen a change in price thus far and 10 (31.25%) have seen two price reductions, while one model (3.13%) has seen three price reductions.  Looking at just the 15 models that feature both Mini-LED and quantum dots (includes both 8K and 4K sets), 3 (20%) have seen one price reduction, 8 (53.3%) have seen two price reductions, and 1 (6.7%) have seen 3 price reductions, meaning 80% of the models with Mini-LEDs and quantum dots have seen at least one price reduction.  Finally, looking at just those sets that feature both Mini-LED and Quantum Dots but are 4K resolution, all 5 have seen at least one price reduction.
In this last set of price reductions Samsung began lowering the price on what would be considered low to mid-priced 4K QD TVs for the first time, albeit making small reductions between 3.7% and 6.7%, but some of the more feature-rich sets have seen total reductions as high as 24.0%, with the average reduction among the Mini-LED/QD sets being 14.9%, and among just those with quantum dots -7.5%.  We believe these offerings are particular to targeted Samsung.com customers and don’t always show up on popular CE product sites such as Best Buy (BBY), but are likely available to any customer that inquires.  That said, as the US TV market has been the strongest globally for the last few quarters, we expect Samsung assumed that strength would carry through much of the new line, but we still believe that Samsung was overly aggressive toward pricing in the US this year, particularly with its Mini-LED sets, and is now bringing in pricing to more reasonable levels.  

Timelines in the display space are particularly variable, and with spending for new display fabs second only to the cost of semiconductor fab and in some cases higher, the risks associated with mistiming new capacity or expansion of existing lines can be a burden that companies must carry for many years, and recently, the closing or conversion to other display modalities has also become a new part of that timeline risk profile.  There have been a number of cases where display producers were willing to take the risk of anticipating the adoption of a new technology, such as Samsung’s push into small panel OLED in 2007 and LG Display’s push into large panel OLED in 2012, but as the display industry matures one would expect that capacity expansion would be a bit easier to predict.
From the standpoint that both LCD and more recently OLED have become mainstays of the display space such decisions should be easier than when speculating about whether a new technology would ever become large enough to justify anticipatory spending in the billions of dollars, but that is not the case.  There are many relatively new factors that make decisions about capacity timelines far more granular than they were years ago, and more aggressive technology development spending has added to the potential for capacity adjustment errors.  China has been a major factor in changing the capacity risk profile for panel producers in that government subsidies have allowed capacity decisions to be less reliant on profitability than is the case for public companies.  This has allowed the Chinese display industry to become the dominant player in the LCD display space and still drives what might be considered unbridled expansion even today.
While capacity expansion timelines are based on long-term demand (or should be), they are colored by short-term issues that can put such decisions in a more or less positive light and depending on the experience of the producer those short-term influences can become major selling points for capacity expansion or reduction.  Given that panel prices, particularly large panel prices, have been rising for the last year, less experienced panel producers can begin to feel that they can remain profitable continually, while others feel that such price increases are a possible warning sign and take a more conservative approach to expansion.  Underlying all of these decisions however is the question as to how long each display technology will be sustainable, and how will new technologies affect existing display capacity.
LCD was a disruptive technology to say the least, essentially ending the reign of the Cathode Ray Tube, but plasma displays, the first self-emitting display technology, were also thought to be a technology that would eventually replace LCD about 20 years ago.  However after peaking around 2010, plasma displays have all but disappeared, especially when Samsung, the leader in the TV market, pulled the plug on the technology back in 2014.
OLED has also been touted as an LCD ‘eliminator’, but while it has been the focus of a great deal of capacity spending OLED co-exists with LCD, with each having their pluses and minuses.  Quantum dots have been another technology that was also touted as a potential hazard to existing display technologies, particularly OLED, but has found its way into the LCD supply chain, giving the older technology an extended ability to compete with OLED, and could be a help to OLED technology if Samsung Display (pvt) is successful in developing its QD/OLED process. 
Micro-LED technology is currently a focus for display development teams, as it too has been touted as the display technology of the future, and spending toward its development has been increasing rapidly, but expectations that new technologies can be so disruptive as to almost immediately replace existing display technology is what marketing teams dream of at night and not particularly practical from a business or financial standpoint.  With the billions of dollars already spent on existing technologies, panel producers, while they might spend on development projects to see if a new technology will pane out, are going to favor spending on what they know and can sell, so when we look at timelines in the display space, we do so with a great deal of skepticism, especially having seen those timelines change more often than not over the years.
That brings us to South Korea, where both Samsung and LG Display reside, and while Chinese panel producers such as BOE (200725.CH) and Chinastar (pvt) are the volume leaders in LCD, South Korean panel producers are trendsetters and their capacity decisions can influence the entire industry both positively and negatively.  Samsung Display’s exit from the large panel LCD space has been a positive influence on Chinese panel producers and has focused much of their attention on competition between themselves now that they see SDC’s exit from large panel LCD as a positive going forward.  Without Samsung to compete with in the space they seem to be expanding LCD capacity to become ‘China’s leader’ in the space, while South Korean producers are focusing more on OLED, which they believe will continue to grow more rapidly than LCD and will also generate premiums that are greater than what they believe can be generated in the more mature LCD space.
Samsung in particular has already begun the conversion of its L7-2 LCD fab to a Gen 6 OLED line, and is expected to begin equipment move in next month.  In this case, we expect the conversion will be rather quick, as some of the backplane equipment is being transferred from its A3 fab.  As both phases of the L7-2 conversion will be using LTPS equipment from A3, which was converted to LTPO, we expect the first phase to be completed by the end of this year and phase 2 by July of next year.  Samsung might be able to ramp these lines faster given their experience and the use of existing equipment, but we take a more conservative approach at least for the next few months.
SDC is also considering the addition of capacity for large OLED panels, meaning notebook and monitor sizes, and has been working with equipment suppliers to develop production equipment for that purpose, but they have yet to decide whether this capacity is necessary or where they might use existing capacity space.  SDC has another LCD line L8-2 and is currently offering for sale the equipment from that line, so they have the potential to replace that space with OLED capacity, or they can convert some existing small panel OLED capacity to the larger panel sizes, but we expect those decisions to be made later this year, and final decisions on whether to expand the company’s QD/OLED production project are also still to be made.
LG Display (LPL) is also evaluating whether to add OLED capacity for similar IT products as it plans for producing OLED panels for Apple’s (AAPL) iPad next year.  While Samsung has been expected to be the provider for the iPad next year, LGD will certainly be a contender for a 2nd spot and will likely need to dedicate new or converted capacity to Apple by 2023, although they currently operate two OLED lines E6-1 and E6-2 with a third line (E6-3) a possibility depending on Apple’s timeline. There has also been some speculation that LGD is considering building a new Gen 10.5 OLED fab, but we believe much of that speculation has been based on the rumors that Samsung Electronics is going to sign a multi-million unit deal with LGD for OLED displays.  Given the relatively low probability of that transaction, we have yet to put such a plan in our database.
The decisions for Samsung Display and LG Display as to whether to expand OLED capacity are primarily being driven by Apple’s adoption of the technology.  As the iPhone line is all OLED, Apple’s use of the technology in tablets, notebooks, and monitors is a catalyst for increasing OLED penetration, and while expansion of OLED penetration in the smartphone space continues, competition from Chinese OLED producers is also expanding.  OLED TV and the use of OLED displays in IT products is where incremental capacity is needed and LGD’s lock on the OLED TV space shifts the focus to small panel OLED.  There is no greater asset in that space than Apples potential adoption of the technology through the rest of its product line and we expect OLED capacity decisions will be predicated on Apple’s plans rather than the near-term issues that might affect panel pricing generally, and while we expect Apple to move more slowly than most, their focus on high quality technology leads us to conclude that there is little reason not to expect a continued migration toward OLED, at least until another technology comes along.

Since September 18 of last year, when the Samsung Galaxy Z Fold 2 was released, there has been rampant speculation about when the next model would appear and what it might look like.  Endless numbers of articles about what might and might not be featured in the new device and dozens of ‘renderings’ have speculated about what such a device might look like, but despite the ‘leaks’, influencer whispers, and supposed conversations with suppliers, there has been no comment from Samsung as to when the Fold 3 might be announced or what it might contain.  Of course, Samsung enjoys the speculation, as it drives consumer interest in the potential product, and probably allows a few hints to be dropped here and there to keep interest alive, but only yesterday was something actually revealed about the next generation foldable that can be considered fact.
The FCC requires certification for every device sold in the US that produce radio waves, and while that sounds a bit limited it does include both devices that intentionally produce radio frequency energy (smartphones, IoT, power adapters, etc.) and those that produce same ‘unintentionally’, such as digital cameras.  This makes certification for a device such as a foldable smartphone a given, and the FCC is required to publish a notification for every device that it certifies, which just recently included the US variants of the upcoming Galaxy Z Fold 3.  While this does not guarantee that the release of such a device is imminent, it is a good indicator that Samsung is preparing the device for release and it gives some clarity to what the device might feature.
The FCC documentation shows that the Galaxy Z Fold 3 supports eleven 5G bands, 15 4G bands, Wi-Fi 6, Bluetooth, NFC, and both Qi and 15W fast charging, but of most importance the certification does confirm that the device supports the S-Pen, which would make it the first foldable to do so and more directly comparable to the Galaxy Note flagship series..  This gives rise to further speculation about whether the Galaxy Note smartphone series will be abandon by Samsung going forward, but still does not clarify Samsung’s stance in the near-term on the Note.  As Note sales have been relatively weak over the last few years and foldables contain larger than normal premiums, logic says that the Note’s days are numbered, but as to when that model might be terminated, we can only guess, although the S-Pen support for the Fold 3 is another pin in the Note Voodoo doll.

​We do note that making a foldable device applicable to a pen is not a simple task and while the touch component is bendable, the pressure of the pen on the foldable screen could damage the display.  While the FCC only confirms the inclusion of the S-Pen support and not details on how the device implements that support, much has been said about Samsung’s adoption of UTG (Ultra-thin Glass) for this device.   
This would offer protection to the display and lessen the impact of the pressure of the pen, however the pen itself is not expected to be stored in the body of the device, as it is in the Galaxy Note series, as the device is more sensitive to dirt and moisture than a static display might be and we note that some of the early problems that Samsung had with foldables had to do with dust and dirt getting into the phone and causing problems with the hinge and eventually the display.  While we have yet to receive an invitation from Samsung, we do expect the Fold 3 to be announced at the Samsung Unpacked event on August 3 given yesterday’s FCC certification, at which point we will see if the other highly speculated features, such as the under-display camera made their way into the new device.

​Yesterday we noted that rumors concerning an agreement between Samsung Electronics (005930.KS) and LG Display (LPL) for the purchase of between 3m and 4m OLED panels had been heating up.  As noted these rumors have surfaced before and at various times comments about such a deal from a number of Samsung executives were both cryptic and definitive, so the rumor seems to ebb and flow with Samsung’s comments.  Yesterday was the flow, with Asian news services hinting that a deal was in the works or imminent, while today is the ebb, with a Samsung executive stating, “There is no change in the idea that our QLED TVs have better picture quality than OLED TVs.  I’m trying to make it clear that the rumors are groundless.  It is true that LCD prices are rising, and we face a difficult situation, but we have enough capacity to overcome as a No. 1 company.”
Does that end the controversy?  Not really, because rumors sell eyeballs and eyeballs are the commodity that rules society currently.  In a month or two there will be a story out of Korea that will hint that the talks have resumed or an ‘influencer’ has rendered a ‘Samsung OLED TV’ from scraps of paper he/she found on the floor of a restaurant where Samsung staff eat lunch.  Samsung will continue to deny any involvement with LGD’s OLED supply, right up until the day they announce such a product, and the rumor mill continues to spin.

​Samsung Display (pvt) made a momentous decision in March of last year.  The company decided to end production of LCD large panel displays by the end of 2020.  This was at a time when LCD large panel prices had declined 27.4% in the previous year, and while there was a slight bounce in large panel pricing early in 2020, SDC was facing continued pressure from Chinese panel producers who were able to provide lower priced panels using government subsidies and had a goal of becoming the global leader in LCD large panel production regardless of the cost.  With COVID-19 also entering the decision process, SDC began its program of closing large panel LCD fabs in Korea, selling it large panel LCD fab in China, and converting some of that LCD capacity to small panel OLED, where the company dominates the industry.
This decision also put Samsung Display in the position of having less of an impact on parent Samsung Electronics, who was forced to source from other panel producers.  At the time of the announcement this change had a positive spin for Samsung Electronics in that it was a buyer’s market for large panels and Samsung would not be burdened by SDC’s losses in the large panel business if panel prices declined further.  Samsung Display however realized that it needed a large panel product to maintain its relationships with both its parent and other large panel customers and began a track toward the commercialization of a new technology that combined OLED and quantum dots.
The technology was based on a layer of blue OLED emitter material essentially covered with a color filter made of red and green quantum dots.  This was not the same as the color filter used by the WOLED process championed by LG Display, which combines green/yellow and blue OLED emitters, forming a white light and then uses a color filter to remove 2 of the three colors from each sub-pixel with phosphors.  In the original SDC QD/OLED model the two OLED emitters were replaced by a single blue OLED emitter and the color filter phosphors were replaced by quantum dots that shifted the blue light to red and green rather than filter out much of the light which should lead to a brighter display.
Unfortunately the only blue OLED emitter commercially available is a fluorescent material, rather than a phosphorescent one, with fluorescent materials producing far less light than phosphorescents.  As the goal of the SDC project was to develop a brighter display, using a fluorescent blue emitter did not produce the desired results and SDC has been evaluating an alternative known as nanorods.  Nanorods are small structures that are ‘grown’ using the same materials used for LEDs, and as the direction of the growth can be controlled, these structures are grown as rods, which are bunched together to form a light source, in this case a blue one.  Using the same quantum dot color converters, an RGB pixel can be created by converting the blue light to red and green and allowing some of the blue to show through in each pixel.  While that sounds relatively simple, getting the nanorods, which are less than 1um wide to stand up next to each other is a bit like herding cats, they tend to go in every direction, so Samsung is using a process called dielectrophoresis, similar to the process used to separate platelets from whole blood, which aligns the rods by using an electric field.  The process lines up the rods vertically, which represents a major step toward the commercialization of the process.

​But there is still one step necessary before SDC is able to produce a true quantum dot nanorod display and that is to regulate the number of nanorods in each pixel.  Since each nanorod is an emitter, if one pixel has more rods than another, the one with the larger number will be brighter and uniformity across the display will suffer.  As this is among the most critical of metrics and a big factor in yield and therefore viability as a commercial product, it is of critical importance, and as the nanorods are deposited on the substrate in an ink, controlling their numbers is quite difficult.  That said Samsung has developed a method to control nanorod pixel density and to further insure that the display is uniform, they have also developed an algorithm that can adjust a pixel’s luminosity to the norm even if it has too many nanorods.
Does this mean Samsung Display is ready to produce QD/NANO displays?  Almost, according to UBI Research, who has analyzed 160 Samsung Display patents relating to QNED.  They have come to the conclusion that SDC just needs to refine those processes and make sure such devices can be considered for mass production at a profitable price point.  As we have noted previously, SDC has been delivering samples of the technology to its parent and potential customers, so it seems they have progressed considerably from where they were toward the end of last year, but their goal of delivering a display product using QD/OLED or QD/Nano by the end of the year is still iffy.  That said, it seems they are getting close.

Along with most of the industry, we have underestimated large panel price increases in both the 2020 2nd half and the first half of this year, with price increases far above the norm and panel prices far above historic levels.  Panel producers continue to be optimistic about most segments of the large panel space, with some seeing orders out to the end of the year.  That said, with a few exceptions, we get the feeling that large panel prices, in particular TV panels, might be seeing less momentum going forward.  We expect that weak TV sales in China and a slowing of TV demand in the US will take some steam out of the TV panel market and temper TV panel price increases as we head into the 2nd half, and higher cost panel inventory will take their toll on TV set sales, limiting TV brands ability to discount into the holiday season.
This leads us to reduce our expectations for TV panel prices in June from an increase of 5.2% to an increase of 3.6%, with smaller panels seeing less of an increase than larger panels. There is the continuing specter of component shortages that can continue to put upward pressure on large panel prices, but from a demand standpoint we expect it will be more difficult for panel producers to continue to raise prices as aggressively as they have in the past few quarters..  We will follow up with more data  as to where we expect large panel prices to wind up over the next few months next week, but in the interim we feel we needed to bring down large panel price increase expectations a bit.