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China demand alters FPD seasonality

Posted: 28 Jan 2010 ?? ?Print Version ?Bookmark and Share

Keywords:China FPD demand? flat-panel display? LCD?

The seasonality of flat-panel display (FPD) shipments has changed due to the increasing demand from China for TVs, notebooks and monitors. This is according to a DisplaySearch report, which stated that demand for LCD and plasma panels from North America and Europe typically weighted most heavily toward the second half of the year. This results in the second half accounting for at least 55 percent of annual demand. But in recent analysis, DisplaySearch forecasts that shipments of large-area FPD including TFT LCD and PDP in 2H 10 will fall to 53 percent, from 58 percent in 2009.

"China is changing because of the world, the world is also changing because of China," noted David Hsieh, VP of DisplaySearch and president for Greater China. "China's influence on the FPD industry is changing the FPD cycle and reshaping the FPD supply chain, with increasing panel and product manufacturing shifting to Chinacreating fierce competition among Japan, Korea and Taiwanese panel suppliers to establish fabs. Together with different characteristics of FPD buying and consumer behavior, this shift makes China a land that is flooded with opportunities and risks."

The demand for small and medium displays (less than 10-inch diagonal, including TFT LCD, OLED, EPD, STN LCD and LTPS LCD) shows the same shift in seasonality, with the second half decreasing to 54 percent of annual demand. China, as an emerging zone for applications like TVs, notebook PCs, monitors, e-books, mobile phones, DSCs and PNDs, has started to alter the seasonality of panel demand, which will influence the whole FPD supply chain as well as the quarterly supply demand balance.

As a result of the economic recession, 2008 was a unique year: FPD demand for 2H 08 was even smaller than for 1H 08. However, 2009 has demonstrated reverse seasonality, with strong 2H 09 demand, accounting for 56 percent of the annual demand.

In 2010, DisplaySearch forecasts the shift in seasonality will be caused by the fact that the peak shopping seasons in China, such as Chinese New Year and Golden Week in May, are in the first half of the calendar year.

To manage the supply demand cycle better, brands and OEMs are developing new strategies to pursue higher allocation in the first half to build inventories. FPD and component suppliers intend to better leverage their capacity and maintain a balanced utilization for a whole year for better cost effectiveness. And more TV, PC and consumer electronics brands are emphasizing new models launched in the first half of the year, especially introducing new technologies, new designs and new platforms.

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