PDP y-on-y shipments drop for the first time

DisplaySearch's latest Quarterly PDP Module and TV Shipment and Forecast Report found that plasma panel shipments fell for the first time y-on-y in Q1.

According to the report, PDP shipments fell 14 percent q-on-q and 1 percent y-on-y to 2.3 million panels, the lowest result since Q3 '05. Plasma panel suppliers' aggregate survey results indicated that they were expecting flat results in Q1 after a weak Q4 '06, so the 14 percent decline was disappointing. With the plasma panel surplus widening significantly, blended ASPs fell 13 percent q-o-q and 27 percent y-o-y to $582, a new low, despite steady gains in average size. With units and ASPs down, revenues plummeted 26 percent q-o-q and 28 percent y-on-y to $1.3 billion, the lowest value since Q2 '05.

The decline can be attributed to loss of share to LCDs, particularly 1080p LCDs, at 37-inch and larger sizes, the report said. In addition, LCD TV panels also experienced a larger-than-expected decline in Q1, down 9 percent q-on-q because demand was pulled in from Q1 '07 to the previous quarter as the result of sharper than normal retailer discounts in the holiday season.

The average plasma panel diagonal grew from 43.2-inch in Q1 '06 and 43.9-inch in Q4 '06 to 44.3-inch in seasonally weak Q1 '07. The 50-inch and larger share rose from 26 percent in Q4 '06 to 29 percent in Q1'07 as the 50- to 42-inch HD price gap narrowed by 21 percent to under $300.

Also, the 1080p resolution plasma panels declined faster than the market, dropping 24 percent q-on-q, a disappointing figure given that 1080p LCD panels increased 19 percent q-on-q. Plasma panel suppliers need a faster transition to 50-inch and above and 1080p to offset the rapid price declines and share declines at 42-inch to enjoy revenue growth. Rising competition from 52-inch 1080p LCD is also a concern.

Fortunately for PDP suppliers, rapid 1080p growth is expected in Q2 '07 with Matsushita ramping 42- and 50-inch PDP along with 58-, 65- and 103-inch. In addition, Samsung and LG Electronics (LGE) just began shipping 1080p plasma panels in Q1 '07 with Samsung expected to ramp 50-inch and 63-inch 1080p shipments and LGE expected to boost 60-inch 1080p output. With Pioneer and Hitachi also producing 1080p panels, all major plasma suppliers are now shipping 1080p panels.

The research firm also reported that Panasonic maintained the top spot with a 31 percent share, down from 40 percent, on a 33 percent decline. Panasonic will likely enjoy the fastest growth in Q2 '07 while it introduces its new line-up, as it did in Q2 '06. LGE came in second with its share rising from 22 percent in Q4 '06 to 27 percent in Q1 '07. It was the only major supplier to enjoy q-on-q growth in Q1 with 8 percent. Samsung SDI remained in third with share rising from 21 percent to 24 percent on a 2 percent unit decline.