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TFT LCD industry goes through hardest time in a decade

Posted: 29 Jan 2009 ?? ?Print Version ?Bookmark and Share

Keywords:TFT LCD? display industry? panel market?

In December 2008, shipments of large-area TFT LCD panels reached the lowest level since May 2007, according to the DisplaySearch Monthly TFT LCD Shipment Database. Shipments were 26.97 million units, down 6 percent month-on-month and 24 percent year-on-year. December revenue for large-area TFT LCD panels fell to $3 billion, down 22 percent month-on-month and 57 percent y-on-y, the lowest level since July 2006.

DisplaySearch also found that panel demand has weakened significantly in all three of the major TFT LCD applicationsnotebook PCs, monitors and TVsand panel suppliers have reduced capacity utilization. Notebook PC panel shipments were 8.3 million, down 3 percent month-on-month and 21 percent y-on-y, which is the lowest level since May 2007. Monitor panel shipments were 10.7 million, down 2 percent month-on-month and 31 percent y-on-y, which is the lowest level since June 2006. TV panel shipments were 7 million, down 13 percent month-on-month and 17 percent y-on-y, which is the lowest since July 2007.

A combination of slow demand, the tendency of leading brands to favor internal sources of supply and depreciation of the Korean won has disadvantaged Taiwan panel suppliers, leading to loss of market share. As the Table 2 below shows, Korean suppliers had more than half the market share in December. This is the second month since Korean suppliers' shares exceed 50 percent on a unit basis.

In terms of the revenues, Samsung was the leader in large-area TFT LCD with 30 percent market share, followed by LG Display at 23 percent. On a shipment basis, LG Display led with a 27 percent market share, followed by Samsung at 25 percent. Both companies' shares reached the highest level for the leading suppliers in four years.

Table 1: Monthly large-area TFT-LCD panel shipments by application (millions)

In terms of market share by application, LG Display led in notebook with a 36.7 percent unit share, followed by Samsung at 33.7 percent and AUO at 17.2 percent. LG Display also led the monitor segment with 23.7 percent unit share, followed by Samsung at 21.5 percent and AUO at 16 percent. In addition, Samsung led in the TV segment with 23.9 percent unit share, followed by LG Display at 23.2 percent and CMO at 17.9 percent.

DisplaySearch also tracks 5-inch to 10.2-inch mini-note panel shipments by size by suppliers in the report. The report findings also concluded that mini-note panel shipments were 1.4 million in December 2008, a 43 percent month-on-month decline from 2.5 million units in November 2008 due to inventory adjustments. AUO led the mini-note panels with 36 percent unit share, followed by CPT at 31 percent.

Table 2: Large-area TFT LCD regional unit market share

According to David Hsieh, VP of DisplaySearch, "The December results were disappointing, but are a true reflection of low TFT LCD low demand. All TFT LCD manufacturers, including Korea- and Japan-based companies, took countermeasures to reduce capacity utilization in December, and this will continue in Q1 09. We believe that monthly shipments in Q1 09 will maintain this low level and that worldwide consolidated TFT LCD makers' utilization will be 60 percent or even less. The TFT LCD industry is going through the hardest time in a decade."

Hsieh added, "Despite this, we are also seeing that shipment and inventory were controlled and the panel prices are likely to stabilize in Q1 09. In some instances, the panel price has been reduced to the cash cost level in business negotiations to avoid the further bleeding of panel suppliers. This is the first signal of the TFT LCD industry hitting bottom."

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