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Samsung, LG decrease monitor panel production

Posted: 29 Jun 2012 ?? ?Print Version ?Bookmark and Share

Keywords:LG? Samsung? display panel? display market?

As smart mobile devices impact the market demand for traditional PCs, monitor product sales continually weaken. A WitsView study indicates that despite significant improvements in monitor products, the lack of apparent development in new functions and special applications coupled with global economic downturn have caused monitor products to be overlooked. Downstream brand vendors have started to adapt their business strategies from expanding aggressively to gaining profits conservatively. Vendors have also reduced their less-profitable products while maintaining strict inventory control, decreasing monitor brand shipments.

With monitor panel demand becoming less aggressive and Taiwan panel makers making selective production strategies, Korean panel makers have begun to adjust their product ratio in generation lines above Gen7. Research conducted by WitsView has noted that 39-in and 50-in TV panels developed by Taiwan offer better profitability, leading to a direct decrease in the production of 32-in, 40-in, 42-in, and 46-in Korean products. As a result, Korean manufacturers are unlikely to fulfill panel demand from TV brand vendors. With LG Display (LGD) and Samsung Display supplying iPad panels, as well as their own TV brands, both companies have reduced their production of monitor panels since 2Q12 and focused on tablet PCs and TV panel products in response to stronger demand from the market.

WitsView further pointed out that Samsung was capable of shipping monitor panels of 3 million units monthly. However, its monthly monitor shipments were projected to slide, between 2 to 2.3 million units after adjusting its production strategy. On the other hand, LGD reduced its production of 19-in, 22-in and 23-in monitor panels due to the increased demand in 9.7-in and 42-in panels. In an attempt to escalate overall profits, LGD has also chosen to focus more on products installed with AH-IPS instead of producing monitor panels.

WitsView estimates that Samsung's monitor shipments in 2012 are expected to reach 26 million units while shipments of LGD are estimated to be lowered from 56 million units forecasted in early 2012 to 52 million units. A further downtrend is possible depending on the future market outlook.

Amid world economic turmoil, panel makers have started to explore long-term product strategies to stabilize their profits. WitsView has concluded that the overall market supply and demand has undergone adjustments owed to the shrinking monitor supply from Korean panel makers. Prospective monitor panel price in the quarters to come are projected to stay steady compared to other application products due to decrease in panel supply.

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