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Optoelectronics/Displays??

Shipments outpaced production for large-sized LCDs

Posted: 31 May 2013 ?? ?Print Version ?Bookmark and Share

Keywords:large-sized LCD? smartphone? tablets? monitor?

According to the latest report from IHS, shipments of large-sized LCDs surpassed total production when measured in terms of area, the result of a deliberate move by panel makers to digest accumulated inventory. Large-sized LCDs in March reached a total shipment area of 11.3 million square meters, a metric showing the expanse of shipped panels during the period and distributed among the panels' four major applications for TVs, notebooks, monitors and tablets. In comparison, production area measuring the spread and breadth of manufactured panels equated to 11 million square metersnearly 340,000 square meters less than the total shipment area, said the market analytics firm.

"March represented the first time in four months that shipments outpaced production for large-sized LCD panels," said Ricky Park, senior manager for large-area displays at IHS. "The last time the same phenomenon took placewhen shipment was higher than productionoccurred in November 2012, an understandable occurrence as manufacturers raced to pump out more displays in time for the December holiday season and Lunar New Year holiday season in China. In March, panel suppliers applied the same tactic to chip away at creeping inventory, the upshot of shipments falling below production levels from December 2012 to February 2013."

After March, however, the current dynamic took a different turn. Pending final figures, forecasts show that production would catch up to shipments starting in April as both indices reach 11 million square meters, with production then exceeding shipments beginning in May. The new movement starts as the industry ramps up for the higher demand anticipated in 2H13.

For all the vicissitudes of the market, panel manufacturers need to continually negotiate a delicate balancing actbetween making sure there is enough inventory, and preventing the inventory at hand from ballooning and crossing into dangerous oversupply. A potent weapon in their arsenal is to turn the screws on production, intentionally limiting manufacturing capacity in fabs, while continually shipping out panels taken from both current assembly and leftover inventory in their possession. Constant vigilance is required in an industry where oversupply is usually the norm, with panel manufacturers always striving to perfect their game.


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