Post a CommentLarge TFT-LCD Panel Market Can Expect Strong 2nd Half
Staff Reporter -- Electronic News, 9/19/2006
Although unit shipment growth for large-sized TFT-LCDs only reached 2.7 percent in Q2, the market is in shape for an excellent second half, as tight supply and price increases bolster the market, according to El Segundo, Calif.-based market research firm iSuppli Corp.
Following weak conditions in the first half, the large-sized panel market is on the path to recovery with strong growth expectations in the second half for all three major applications: desktop PC monitors, notebook PCs and televisions, the firm noted.
iSuppli believes large-sized TFT-LCD panel unit shipments in Q3 will rise by 9 percent sequentially, with an even stronger Q4 and sequential growth reaching 10.9 percent.
As a result of this analysis, iSuppli says it has updated its TFT-LCD unit forecast for the year to 49.5 million panels shipped for television, 135.1 million units shipped for monitors and 75.9 million units shipped to the notebook PC market.
The move to cut utilization rates in order to reduce inventory and control oversupply seems to have paid dividends for large-sized LCD panel suppliers: as demand has started to recover in the PC market bolstered by lower prices, the back-to-school push and wider expectations for the holiday season, the supply situation for LCD panels for desktop monitors has shifted to a condition of tightness, the firm noted.
In addition, strong demand has been reported for wide-format monitor panels, especially for the 19, 20 and 22inch sizes.
The notebook market is already recovering and also is transitioning to larger sizes and wider format.
“Lower system prices are expected to boost demand considerably, especially during the holiday season,” said Sweta Dash , director of LCD and projection research at iSuppli, in a statement. “The problem is that due to a shift among suppliers to making larger-size, wider-format panels, supply is expected to fall short of demand, which may throw a wrench into how large of a rebound this market will experience. If panel price increases are too high, too fast, they may curtail demand before it reaches its full potential.”
WORLDWIDE RANKING OF THE TOP TFT-LCD MAKERS IN Q1 AND Q2 2006Ranking by Percentage of Unit Shipments
|
Q2 Rank |
Vendor |
Q1 Market |
Q2 Market |
|
1 |
Samsung |
20.18% |
20.42% |
|
2 |
LG Philips LCD |
17.66% |
18.42% |
|
3 |
AU Optronics |
14.91% |
15.92% |
|
4 |
CMO (ChiMei) |
11.03% |
11.17% |
|
5 |
CPT |
8.37% |
8.90% |
|
6 |
Quanta |
6.20% |
5.66% |
|
|
Others |
21.77% |
19.51% |
While the future quarters hold good news for panel suppliers, they may bring worry for panel buyers, as ever-increasing prices add to their concerns regarding having a sufficient quantity of LCDs for the holiday season. Although some buyers are trying to hedge by double booking their LCD orders, this is actually making the market more unstable and is contributing to faster price increases, especially for 17-inch monitor panels.
After months of declining prices, mainstream desktop PC monitor panels have begun a sharp increase due to this lack of supply. For example, 17inch panels now are being offered at a price between $120 and $125—about 18 percent to 23 percent higher than the July Average Selling Price (ASP) of $102.
iSuppli expects prices to increase for most desktop monitor and notebook panels throughout the second half of 2006, especially in Q4.
“It’s not just the PC side; some suppliers already are reporting tight supply for 32-inch television panels as well,” Dash said. “LCD-TV panel supply also is going to be tight as demand increases for the holiday season and consumers continue to make the upgrade from CRT TVs.”
In Q2, Samsung Electronics Co. Ltd. and LG Philips LCD Co. Ltd. (LPL) maintained their hold on the first and second positions in the TFT-LCD panel market with 20.4 percent and 18.4 percent shares of unit shipments, respectively.
AU Optronics Corp. (AUO) was in third place with 15.9 percent of the market, up a full percentage point.
In contrast, Quanta’s share of the market declined in the second quarter by 0.55 of a percentage point.
AUO’s gain in Q2 came mostly from the notebook market, where Quanta has a stronghold. The AUO/Quanta Display Inc. merger is expected to be completed in October.
Next, Taiwan-based Chi Mei Optoelectronics Inc. held onto the fourth position with 11.2 percent of the market followed by Taiwan ’s Chunghwa Picture Tubes Ltd. (CPT) with 8.9 percent and Quanta with 5.7 percent.
The table below and attached presents iSuppli’s estimate of large-sized TFT-LCD panel suppliers’ unit shipment market share in Q2.
iSuppli’s Q2 market share figures indicate Taiwanese firms continue to lead the overall large-sized LCD panel market with a 48.5 percent share of unit shipments, followed by Korea at 40 percent.
However, Korea is still leading in the LCD-TV panel market with 44.9 percent market share, and Taiwan is following closely behind with 41.6 percent of the market.
Increasing production from seventh and 7.5generation fabs has helped Korea to increase its lead and to gain market share in the second quarter.
Korea also leads in notebook LCD panel production with a 49.7 percent market share. Taiwan holds a 55.7 percent unit share in the monitor market, followed by Korea with a 34 percent share, iSuppli concluded.
