Global display panel manufacturers are expected to reduce production in October as weaker television and IT demand puts pressure on inventories, according to marekt intelligence firm Omdia.

The average utilisation rate of display manufacturing plants is forecast to fall by three percentage points from September to 80 per cent in October, according to Omdia’s latest Display Production & Inventory Tracker.

The decline is expected to be driven mainly by weaker demand for television panels towards the end of the year and sluggish demand for IT panels.

Rising memory prices are also putting pressure on device prices, further weighing on demand for IT panels, Omdia said.

The research firm said production volumes for IT panels had significantly exceeded shipments in July as mobile PC display shipments weakened, increasing inventory pressure on manufacturers.

Panel makers are consequently expected to take a more cautious approach to production as they seek to prevent further declines in panel prices.

BOE, China Star and HKC Display, the three largest panel makers in China, are forecast to cut their average fab utilisation rates by four percentage points month-on-month.

The expected cuts highlight the pressure facing panel manufacturers as they attempt to balance production with weaker demand and elevated inventories.

Finally, the firm explained that the combination of softer demand and rising inventories means manufacturers are increasingly adjusting production to support panel prices rather than maintaining output levels seen earlier in the year.