Market Status

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.