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TFT-LCD surplus increases in Q3 '02

Posted: 08 Oct 2002 ?? ?Print Version ?Bookmark and Share

Keywords:TFT-LCD? LCD monitors?

Large-area TFT-LCD surplus rose sharply from two percent in Q2 '02, to 12 percent in Q3 '02, on an 8 percent reduction in panel shipments, revealed DisplaySearch in the preliminary results of its latest "Quarterly TFT-LCD Supply/Demand and Capital Spending Report."

DisplaySearch said that the shipment decline can be attributed to excessive panel shipments in Q2 '02, resulting from widespread double booking in expectation of strong demand through the quarter. While notebook PC and LCD monitor shipments each declined 3 percent in Q2 '02, notebook and LCD monitor panel shipments surged 8 and 10 percent, respectively, resulting in significant panel inventory and triggering price reductions.

However, large-area TFT-LCD surplus is seen to fall from a high of 12 percent in Q3 '02 to 3 percent in Q4 '03, with lower prices driving demand for LCD monitors and LCD TV receivers, said DisplaySearch. The tight supply outlook for Q4 '03 is expected to trigger the next increase in prices. Until then, prices are forecasted to continue facing downward pressure with the rate of price reduction which is seen to peak in Q4 '02, and slow thereafter. Moreover, DisplaySearch said that surplus will narrow further over the forecast period, despite a projected 102 percent growth in capacity over the next 8 quarters to 5 million square meters in Q2 '04.

On the other hand, DisplaySearch predicted that TFT-LCD equipment spending will reach a record high of $8.3 billion in 2003, up 74 percent Y/Y despite continued price reductions. First quarter spending next year alone is expected to be larger than equipment spending for all of 1999 and significant spending also seen to continue due to the promise of lowered costs coupled with the opportunity for ample profits at larger panel sizes.

With demand anticipated to respond significantly as large-area panel and product prices reach new lows, leading panel suppliers are preparing for the anticipated growth and profitability opportunity at larger sizes, where demand for low-priced 17-inch to 40-inch LCD monitors and LCD TV receivers should be significant.

Moreover, growing interest in larger substrates for the LCD-TV receiver market has resulted in the expectation of a number of new fab investments, causing DisplaySearch to raise its 2004 equipment spending forecast by 10 percent to $7.1 billion, down 15 percent from 2003, but the second largest annual expenditure to date.

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