Market Status

Extending the growth momentum from 2Q09, global large-sized TFT-LCD panel shipments grew by 17.3% QoQ to 145.52 million units, YoY growth has also exceeded the historic high, up by 32.0%1; among three main applications, both LCD TV and notebook panels celebrated outstanding double-digit QoQ growth, whereas LCD monitor panels only showed moderate growth, with mediocre shipment performance in the peak season. In terms of area shipment, spurred by substantial increase in volume and panel size, the aggregated area shipment surged 18.3% QoQ to 23.77 million square meters. On the whole, panel industry posted historic high performance in both unit shipments and area shipments in 3Q09.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9-inch and above) continued its growth momentum since February this year and reached 49.59 million units in September 2009, up by 2.1% MoM and 26.1% YoY. Thanks to the stable supply of upstream components and continued stocking by downstream customers for the traditional hot season, large-sized panel shipments hit a new record high with 17.2% QoQ growth in the third quarter.

In a consumer electronics market where LCD TV is the central focus, Samsung, the leading global TV manufacturer, managed to jump into the limelight with a new design concept – the ‘LED TV’. Even though this LED-backlit LCD TV cannot be considered a product with a total innovative concept, with the combination of features such as Samsung’s edge-type LED backlight, new ID design, and the ultra slim 2.99cm profile, a star product was born and its became an instant hit this year. Samsung intentionally coined the term ‘LED TV’ to differentiate this new model from all the existing LCD TV product lines available on the market, in an effort to establish a brand new market segment.

In late September, panel prices of monitors and notebooks marked an earlier-than-expected turning point of a downward trend – this occurred after seven consecutive months of panel price hike, amid downstream customers’ increased set cost and rising inventory level of channels.

Backed by a six-month panel price hike, as well as panel makers’ efforts to reduce costs, panel makers’ profitability has reached its peak this year. According to forecast from WitsView, top-tier panel makers will witness excellent profitability across all three applications this quarter.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9-inch and above) continued its seven consecutive month of growth, and reached 48.58 million units in Aug09, up by 2.6% MoM and 31.2% YoY1. Despite reduced glass supply due to the fire breakout at Corning’s furnace in Japan, optimism about the sales of the hot season in the second half of the year has fueled the growth momentum of panel shipment in August. Forecasts show that after the overall inventory reaches a relatively more sufficient level, compared to the previous months, panel prices may face a turning point, therefore, inventory adjustment of panel makers and their downstream clients is crucial. In light of the above, panel shipment performance will have to rely on end market sales performance during China’s National Day holiday and Christmas holiday.

With gradual shift in market supply and demand, panel price trends in 1HSep reached another turning point – after seven consecutive months of price increase, downstream customers have indeed felt the pressure from rising set cost; this pressure has also taken its toll on second and third-tier brand customers and SIs. On the other hand, panel inventory level has been rising since the second quarter – in the first half of the year...

Thanks to substantial panel price rebound and cumulative material cost decrease over the past few quarters, panel makers have been witnessing a financial turnaround recently. In order to foster a healthy relationship in the supply chain, panel makers will be less aggressive in their price negotiation with component makers.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9-inch and above) reached 46.39 million units in Jul09, up by 7.0% MoM and 36.7% YoY. As 2HAug marks the beginning of strong back-to-school demand, brand vendors have begun to pull in. Meanwhile, as US and European markets have gradually recovered, consumers are more inclined to increase their spending on electronic products, and therefore, both unit and area shipment in July maintained its growth momentum.

After two consecutive quarters of decline, the panel industry has finally escaped the gloom in 2Q09, global large-sized TFT-LCD panel shipments grew by a staggering 42.3% QoQ to 121.87 million units, YoY growth has also exceeded the historic high, up by 9.8%. All three main applications celebrated their double-digit QoQ growth, with outstanding shipment performance; in terms of area shipment, spurred by substantial volume growth, the aggregated area shipment reached 19.88 million square meters, an astonishing 37% QoQ growth. Therefore, in 2Q09, panel industry posted outstanding results in both unit shipments and area shipments.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9-inch and above) reached 43.35 million units in Jun09, up by 6.8% MoM and 21.9% YoY. In Q2, shipments continue to exceed historic standards month after month. The issue of upstream component shortage continued to surface, especially after the repercussion of glass shortage, causing a supply gap for Taiwanese panel makers. This turned into a warning sign of panel short supply, and led to the steady panel price increase. In terms of demand, June was a traditionally slow season, therefore, robust shipments inadvertently created a stronger than usual traditional weak seasonality; weaker than usual traditional strong seasonality market phenomenon. After inventory replenishment, the strength of future supply and demand will have to stand the test of end-market sales. As for the outlook of 2H09, the market is under low visibility again, particularly after downstream inventory was restored to a healthy level, since most makers tend to be more conservative, it could imply that panel makers may not be able to set the stage for a continual price increase.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9” and above) reached 40.59 million units in May09, up by 7.1% MoM and 4.6% YoY. For two consecutive months, shipments have steadily surpassed that of last year. The issue of invisible demand in the past has gradually cleared as robust domestic demand from China and deferred consumption spurred the upstream panel shipment, and prolonged the market momentum in 1Q09. Meanwhile, in order for panel makers to break-even in the second quarter, panel prices were on an upswing, resulting in simultaneous increase of price and quantity in May09. To avoid losing market share, the majority of downstream vendors have decided, at this stage, to suffer the difference of its cost and retail price rather than making adjustments following this wave of panel price surge. However, end market demand will be the key factor in the future, as it will affect panel pricing trend.

In recent months, the rapid utilization rate increases by panel makers has cleared away the previously accumulated glass substrate inventory. The current glass substrate output is now immediately consumed by eager buyers. As the capacity increases from the furnaces can not keep up with the rising glass substrate input, a shortage has occurred.

Due to the iPhone's popularity and multi-touch support from the upcoming Windows 7, touch screens have become a hot topic in the Taiwan IT industry. Before all this hype, Taiwan was already home to many touch screen makers, due to its strong TFT-LCD and system integrator supply chain.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9” and above) reached 37.92 million units in Apr09, up by 6.6% MoM. Compared to the same period of last year, an increase was finally witnessed, where they inched up by 3.7%. Since the market rebound, it has led to more aggressive inventory replenishments and extra ordering by downstream clients. But amid the still existing macroeconomic woes, it should be noted a cautious market outlook persists. Beginning from Apr09, the demand visibility in 2Q09 has at least become clearer among the 3 main applications. China’s Labor Day holidays and the launch of new models in major markets helped drive up the TV and NB panel demand. As for monitor panels, it continued to follow the stable demand seen during Mar09. This allowed the panel prices of the 3 main applications to rise, as panel makers tried to narrow their losses.

Since the emergence of the rush order effect in Feb09, not only has it provided a much-needed boost to the utilization rates of Taiwan’s panel makers, it has also helped ease the growing operational pressure on upstream component makers.

Following the severe market downturn in 4Q08, the impact from the macroeconomic woes could still be notably felt in 1Q09, as global large-sized TFT LCD shipments fell by another 6.4% QoQ to 85.61 million units. On a yearly basis, this was equivalent to a 17.4% decline. Area-wise, they too fell by 4.4% over 4Q08 to 14.51 million square meters.

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9” and above) reached 35.56 million units in Mar09, up by 27.8% MoM, but still down by 4.2% YoY. Despite the influx of orders from downstream clients during Jan09 and Feb09, due to the panel makers’ low utilization rates and shortage of some components, the shipments during the two respective months were not notable. But in Mar09, panel makers were more capable in handling the orders, thanks to rising utilization rates and more stable component supply. Coupled by the scheduled launch of new end products in 2Q09, it helped further push up the aggregated panel shipments in Mar09. Meanwhile, as Mar09 marks the end of the first quarter, in light of the heavy losses incurred in 4Q08, the 1Q09 panel shipment performance and quarterly financial report will be under a lot of attention. Amid this pressure, it also spurred panel makers to more aggressively boost their shipments, thus resulting in a higher-than-expected growth.

According to WitsView's 1Q09 LCD TV retail price survey, prices for the mainstream 19~52" segment declined by an average of 7.5% QoQ, a smaller drop compared to the 8.9% QoQ drop in 4Q08. The 22" and 26" witnessed the biggest declines, while the 46" and 52" fell the least.

According to WitsView’s survey, global large-sized panel shipments (including the 8.9” and above) reached 27.82 million units in Feb09, up by 25.1% MoM. But on a YoY basis, it still amounted to a 16.1% fall. After 5 consecutive monthly declines since Sep08, an increase was finally witnessed in Feb09. This was mainly attributed to the downstream vendors and retailers inventory restocking in the start of the new 2009 fiscal year. Coupled by China’s “Home Appliances to the Countryside” policy, the growth momentum behind monitor and small-sized TV shipments grew considerably. The current utilization rates can not catch up with the influx of rush orders. The previous uncertain panel order visibility has become clearer through April. Nevertheless, in the wake of last year’s sluggish market conditions, most panel makers are still conservatively observing the market demand after May. Despite the rush order effect and panel shipment increase, whether the market can more notably rebound will rest on how the confidence level of the entire TFT LCD supply chain develops.

Text Size: SML Relative low and high point of WitsView's LCD market confidence index (MCI) projected to occur respectively in Mar09~Apr09 and Aug09~Sep09 Published 3/3/2009 Use of the Fourier Transform on WitsView’s monthly averaged MCI data (Sep03~Dec08) reveal that the next relative MCI low and high point are projected to occur during Mar09~Apr09 and Aug09~Sep09, respectively.

According to WitsView’s survey, global large-sized panel shipments (including the 8.9” and above) reached 22.23 million units, down by 16.9% MoM and a staggering 33.5% YoY. Looking at the recent industry development, amid the Chinese Lunar New Year holidays, there were fewer working days in January. Coupled by the sharp utilization cuts by the Taiwan, China and Japan panel makers, the average panel inventory levels have been maintained at less than 3 weeks. This has created a situation where not all of the downstream clients’ rush orders can be satisfied now. Nevertheless, the persisting macroeconomic woes continue to push up unemployment rates. The resulting tighter consumer spending remains as a huge obstacle to the downstream market demand. Faced with the unfavorable conditions both from an industry and market standpoint, the low confidence level has made the traditional weak seasonality even weaker.

As first tier TFT makers swing to huge financial losses in 4Q08, due to the impact from the faltering global economy, obtaining further material costdown is one of the most efficient ways to improve businesses. Thus, the component price war is expected to be exceptionally intense this quarter.

According to WitsView’s survey, worldwide large-size panel shipments in November reached 25.83 million units, a 23.7% MoM and 26.4% YoY decline. The shipment drop during the traditional strong season stemmed from the brand vendors’ cut back in orders, as the persisting macroeconomic woes weighed on the end market demand. In the NB segment, only 7.86 million 12.1” and above panels were shipped. This was equivalent to a staggering drop of 28.4%. Aside from the sluggish end market demand, the sales momentum of such products were also affected by the growing popularity of the below 11” netbooks. Meanwhile, monitor panels fell by 23% to 10.46 million units, an indication of the continued difficulty in effectively clearing away the accumulated inventory. Finally, TV panels fell to 7.51 million units, down by 19.3% MoM. In contrast to the monthly change during the same period of last year, shipments fell by a mere 2%. Despite the arrival of the year-end Christmas sales, it can be seen that the market environment remains in a slowdown.

According to WitsView’s Survey, worldwide aggregated large-sized panel shipments in October reached 33.9 million units, a MoM decline of 9.2% and a YoY decrease of 8.9% as well. As the global financial storm forces consumers and enterprises to significantly tighten their belts, the demand is exceptionally weak this year. Traditionally, for the preparation of year-end Christmas sales, panel shipment should have reached the peak in October, but it seems that the shipment track of 2H 2008 would not follow the past pattern and the peak should be in September. With the sluggish end market demand, panel shipment declines were seen in all three applications during October. Even though TV panels usually have a big jump in year-end sales, it decreased 5.6% MoM to 9.3 million units. Monitors were most affected by the weak seasonality, dropping 13.2% to 13.6 million units. As for NB segment, it also showed a decrease of 6.9% MoM to 11 million units.

Global aggregated large-sized panel shipments in 3Q08 reached 105.3 million units, a QoQ decrease of 4.9% and a mere 3.4% YoY growth. Thanks to preparations for China’s National Day holidays and year-end sales promotions, TV panel shipments were up monthly during the third quarter. For 3Q08, they reached a new record high of 26.7 million units, up 12.7% QoQ. In the IT segment, in the wake of the sharp panel price falls in 3Q08, and the strong inventory pull-in during 1H08, it resulted in overly high inventory levels for both brand vendors and SIs during the beginning of 3Q08. In general, as the end market demand was severely impacted by the global financial turmoil, both consumers and enterprises tightened their belts. Due to the sluggish demand, NB panels instead fell by 3.7% QoQ to 34.1 million units. Monitors fell even more notably, down by 13.8% QoQ to 44.5 million units. On a yearly basis, this amounted to a decrease of 9.2%.

According to WitsView’s survey, worldwide large-size panel shipments in September reached 37.3 million units, a 5.7% MoM increase and a 6.4% growth on year. Due to preparations for China’s National Day holidays and year-end Christmas sales promotions, growth was seen for the three main applications during September. Meanwhile, amid further deterioration in the global financial storm, both the corporate and consumer confidence has hit an all-time low, resulting in a much weaker-than-expected market demand during the second half of 2008 when compared to previous years. Growth evidently started to slow down in June. Beginning from July, the annual growth rate was only in the single digits. For September, TV panels were up by 7.7% MoM to 9.9 million units. In the IT segment, NB panel shipments grew sequentially by 6% to 11.8 million units. As for monitors, after a period of inventory adjustments, they grew by 4.4% MoM to 15.7 million units.

According to WitsView’s survey, worldwide large-size panel shipments in August reached 35.3 million units, a 7.8% MoM increase and a mere 2.2% growth on year. Since SI makers and brand vendors started to adjust their inventory levels in June, panel shipments have fallen for two consecutive months. The market environment has been further battered by the slowdown in the global economy, weak end market demand and absence of a market boost from the Beijing Olympics. However, for August, panel shipments have at least returned to June’s levels. By observing the current panel orders placed by SI makers, due to the traditional strong seasonality (albeit much weaker than previous years), shipments are expected to continue increasing in the following months. Among the three main applications, TV panels experienced the biggest growth in August—a positive sign amid the current sluggish market conditions. With TV brand vendors starting to pull-in inventory for the year-end promotion sales, TV panels were up sharply by 18.6% to a new high of 9.2 million units. In the IT segment, NB panel shipments were relatively the same as last month, down by a mere 0.7% to 11.1 million units. As for monitors, due to the low base level in July, it grew by 8.5% to 15 million units

According to WitsView’s survey, worldwide large-size panel shipments in June reached 35.5 million units, an 8.4% MoM decrease and a 13% growth on year. For 2Q08, shipments totaled 110.8 million units, up quarterly by 7%. As June simultaneously marked a quarterly end and the mid-year inventory accounting, both the seller and buyer were under accounting and inventory pressures. Panel orders were cut by some of the brand vendors in June, despite panel makers trying to secure orders via price reductions. The average panel price drop during June was between 2~3%. During 1H08, given the limited capacity increases and anticipation of panel prices rising again in the second quarter, downstream clients pulled-in their inventory earlier, resulting in stronger-than-expected panel shipments. However, as the retail channels were impacted by rising oil prices, inflation problems and the credit squeeze crisis, the end market was essentially weak. This had led to a build-up in inventory throughout the whole supply chain. Due to the higher inventory levels, brand vendors and SI makers experienced a tighter cash flow. Meanwhile, amid the lower-than-expected panel consumption, after a mere 2-month panel price increase, that began in April, they started to trend downwards again in June. Shipment-wise declines were seen in all three applications. The most notable drop occurred in the monitor segment, where it fell by 12.5% to 15.9 million units. Meanwhile, TV and NB panels were respectively down by 2.8% and 6% to 7.8 million and 11.7 million units.

According to WitsView’s survey, worldwide large-size panel shipments in May reached 38.7 million units, a 6% MoM increase and a 25.4% growth on year. Looking back at 2007, shipments began to notably increase in Mar07. Rising by a monthly average of 7%, growth only started to slow down in Nov07, as downstream vendors concluded their inventory preparations for the year-end Christmas sales. The same trend was witnessed in the panel price segment as well. Prices started to climb in Apr07, stabilized in Nov07 and started falling in Dec07. Due to last year’s market development, both the buyer and seller have adjusted their procurement and sales strategy in 2008. In 1H08, the demand and supply dynamics has been quite different when compared to 2007. Given the possibility of panel prices rising again in 2Q08, downstream vendors pulled in their orders earlier, resulting in a stronger than usual first quarter. Separately, panel makers maintained a near 100% production utilization rate. Unlike the capacity reduction seen during 1Q07, the output from the G6, G7, G7.5 and G8 continued to grow. Price-wise, panel makers raised the monitor price quotes in Apr08. Yet, the rise occurred at a time when prices were already at a relatively high base level. Coupled by the downstream vendors’ already sufficient inventory and weak market demand stemming from the traditional slow season, there was little momentum behind further price increases in May. Eventually, a 1~2% price increase was seen for some monitor sizes, while the remaining stood flat. Amid the weak price momentum, the global large-sized panel shipments still trended upwards during May. Notebooks jumped by 11% to 12.5 million units. TV and Monitor panels were respectively up 3.6% and 3.8% to 8.1 million and 18.2 million units.

In April, global aggregated large-sized panel shipments reached 36.6 million units, dropping slightly by 1.6% MoM, but equivalent to an annual increase of 29.7%. In March, given the smaller shipment base level in the preceding month, the monthly shipment growth still grew by 12%. The increase was mainly contributed by the IT panel segment. For April, the shipment performance was seen to be roughly the same as in March. Aside from the IT panel sales growth in the emerging markets, the overall market demand has become a bit more subdued. Coupled by the fact that the TV panel segment is still being affected by the slow season, its overall demand remains weak. In the 3 main applications, NBs inched up by a mere 0.2% to 11.2 million. As for the TV and monitor panels, they dropped respectively by 2.9% and 2.1% to 7.8 million and 17.5 million units.