Early June Panel Pricing

6/7/2021

Early June Panel Pricing

Predicting panel pricing has been a fools game for the last year as the number of extraneous events and influences has increased to the point where typical metrics and basic logic do not seem to hold. Everything from the COVID-19 pandemic to the Trump administration trade restrictions and now a lack of semiconductor capacity, power outages, and an unprecedented number of fires and similar issues at various fab, have all contributed to what has become the most volatile period for panel pricing that we can remember. There have been volatile times before, but they tended to fit the mold of what would be called normal cyclicality, so in order to illustrate the unusual period that we are currently in, we put together three charts that show month over month aggregate panel price changes for the three main large panel categories.
Monitor and notebook (considered IT products) have generally been the least volatile panels, while TV panel prices are more so, and the overall trend for monitors during the last 3 and a half years has been for relatively small negative incremental changes in m/m pricing until last year. Using the same data the yearly metrics look like this:

The last 17 months, and particularly the last 5 months have been so far out of the averages as to make them questionable, but the data is what it is. That said, given the increasing number of variables that go into building estimates for monthly panel pricing, we will fall back on an old tried and true method of using averages for a month or so to see if results are more accurate. Based on what has occurred this year, monitor pricing should increase by 5.7% in June, and while our gut tells us this is probably too high, our gut has been wrong a fair number of times over the last 17 months. Following the same metric, Notebook pricing should see an increase of 3.7% in June, which seems a bit more reasonable, and TV panel pricing should see a 5.2% increase. While these projections are based on averages which gives them a close proximity to trend lines, when things change, which they eventually will, averages will become worthless for a period until there is enough new data to reduce the influence of what has been the norm for the last few months. We do expect that a return to ‘normality’ will occur, but are less sure of the rate of change than when it might occur. We fear a steep curve, but hope for a more gradual one as we head into the 2nd half.
One quick note – Aggregating panel data has an inherent problem in that panel sizes and characteristics change over time, and when new models are added and old models are removed from data sources, it can change averages at odd times and skew the data. In the charts below, we took current panel models and prices and ran them back to the beginning of 2018. If there was no data for some models we took the first available price point and filled in earlier blanks using that price. While this might reduce the volatility a bit, it gives a more accurate account of how the category pricing actually moved over the period.