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TFT-LCD market awaits fate in 1Q12

Posted: 28 Dec 2011 ?? ?Print Version ?Bookmark and Share

Keywords:LCD market? LED TV? panel demand?

According to WitsView, a research arm of TrendForce Corp., the annual large-sized panel demand upped by seven percent YoY this year due to the growth in the tablet segment. At the same time, LCD TV, monitor and netbook panel demand dipped one percent, five percent and 15 percent YoY, respectively. Regular-sized NBs gained five percent CAGR, but still significantly fell short of expectations. These figures show how the weak macroeconomic conditions have seriously affected the overall market demand, stated WitsView.

This year, the LCD panel industry was hit hard by the aftermath of the March 11 earthquake and tsunami in Japan, worsening credit crisis in Europe and the U.S., and China's economic growth slowdown. Not only did this put panel makers' businesses in the red, it also dealt a severe blow to the consumer market confidence. The sluggish market demand and downstream clients' conservative inventory stock-up resulted in the panel industry to stagnate and slump since 2H11.

panel market

The poor market demand and downstream clients' conservative inventory stock-up resulted in the panel industry to suffer in 2H11.

Back in 2009, spurred by the Chinese government's relevant polices and measures in expanding its domestic demand, panel makers aggressively raced against each other to seek China's approval in setting up production lines there. But as the market evolved, the worsening oversupply conditions this year led to panel makers posting severe losses. This forced them to continuously delay their plant building plans. On the other hand, backed by China's strong support, the Chinese panel makers have now built a strong manufacturing base. Undoubtedly, this development will further complicate the panel demand and supply dynamics next year, the market research firm forecasted.

For this December, due to preparations for the upcoming Chinese Lunar New Year holidays and shorter working days in January and February next year, brand vendors have been conducting earlier-than-usual inventory preparations. The increased panel orders have helped stabilize panel prices. In response, panel makers have raised their utilization rates in hoping to improve their financial performance in 4Q11. Yet, it should be noted that as the inventory pull-in schedule has been moved up, it will also affect the demand during January and February. For next year, if panel makers maintain their average 75 percent utilization rate as seen in the current fourth quarter, the inevitable rise in the inventory may render panel prices and market confidence to spiral downwards again. But if panel makers timely reduce their overall production output, it will provide support to the panel price trend. By March, downstream clients will begin to replenish their inventory, as they make preparations for the market release of new models and upcoming sales campaign for China's Labor Day holidays in May next year. By then, panel prices may finally experience a rebound, thereby providing a strong stimulus to the market doldrums.

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