China's liquid crystal display (LCD) TV market remains healthy despite panel inventories increasing among the Chinese TV manufacturers, a report showed Thursday.
According to the report by market researcher DisplaySearch, the inventory level in China is still healthy even though TV retail sales during China's Labor Day holidays earlier this month were not as good as expected.
Worries have been growing in the market over the high level of panel inventories held by Chinese set makers for Labor Day, which fell on May 1.
"Due to pre-promotional efforts and stronger demand from rural cities, the LCD TV sales result is likely to come in at lower single-digit growth for the May Day holiday," said Vera Wang, an analyst at DisplaySearch.
"Suning Appliance Co. and some other Chinese retailers have extended the promotion period after the May Day holiday, so we expect that the inventory will fall from the current level."
China is the largest LCD TV market in the world and Chinese TV makers are buying many panels from makers in South Korea, Taiwan and China.
In China, seasonality in the TV market is strong and TV brands tend to increase inventories before long holidays such as New Year's Day, the Chinese New Year, Labor Day and the Chinese National Day in October.
These inventories are seen to have a strong influence on LCD TV panel makers' shipments. While the inventory builds are good for panel makers, the retail sales results should justify the inventory.