Strong second half for large TFT-LCD panels
Despite achieving unit shipment growth of only 2.7 per cent in the second quarter, the large-sized TFT-LCD panel market is in shape for an excellent second half of 2006, as tight supply and price increases bolster the market, according to 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.
iSuppli believes large-sized TFT-LCD panel unit shipments growth in the third quarter will rise by 9 per cent sequentially, while in the fourth quarter unit shipments will be even better, managing 10.9 per cent quarterly growth.
Because of this growth, iSuppli has updated its TFT-LCD unit forecast for 2006 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.
iSuppli’s worldwide forecast for large-sized TFT-LCD panel unit shipments by quarter is shown in the figure below and attached. iSuppli defines large-sized LCD panels as those having a diagonal dimension of 10-inches or more.
The move to cut utilisation 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.
Furthermore, strong demand has been reported for wide-format monitor panels, especially for the 19-, 20- and 22-inch 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. “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.”
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, 17-inch panels now are being offered at a price between $120 and $125 — about 18 per cent 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 the fourth quarter.
“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 the second quarter of 2006, Samsung Electronics Co Ltd and LG Philips LCD Co Ltd. (LPL) maintained their hold on the No. 1 and No. 2 positions in the TFT-LCD panel market with 20.4 percent and 18.4 percent shares of unit shipments, respectively.
AU Optronics Corp was third with 15.9 per cent of the market, up a full per centage point from the second quarter. In contrast, Quanta’s share of the market declined in the second quarter by 0.55 of a percentage point.
AUO’s gain in the second quarter came mostly from the notebook market, where Quanta has a stronghold. The AUO/Quanta Display Inc merger is expected to be completed in October. 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 per cent.
The table below and attached presents iSuppli’s estimate of large-sized TFT-LCD panel suppliers’ unit shipment market share in the second quarter.
Table: Worldwide Ranking of the Top Large-Sized LCD Panel Makers in Q1 and Q2 2006 (Ranking by Percentage of Unit Shipments)
Q2 Rank Vendor Q1 Market Share Q2 Market Share
1 Samsung 20.18 per cent 20.42 per cent
2 LG.Philips LCD 17.66 per cent 18.42 per cent
3 AU Optronics 14.91 per cent 15.92 per cent
4 CMO (ChiMei) 11.03 per cent 11.17 per cent
5 CPT 8.37 per cent 8.90 per cent
6 Quanta per cent 6.20 per cent 5.66 per cent
Others 21.77 per cent 19.51 per cent
Source: iSuppli Corp., September 2006
iSuppli’s second quarter market share figures indicate Taiwanese firms continue to lead the overall large-sized LCD panel market with a 48.5 per cent share of unit shipments, followed by Korea at 40 per cent.
However, Korea is still leading in the LCD-TV panel market with 44.9 per cent market share, and Taiwan is following closely behind with 41.6 per cent of the market.
Increasing production from seventh- and 7.5-generation 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 per cent market share. Taiwan holds a 55.7 per cent unit share in the monitor market, followed by Korea with a 34 per cent share.
For more information, visit www.isuppli.com
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