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Analyst: Tablet panel shipments to grow 56% this year

Posted: 07 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:iPad? Galaxy Tab? IPS? LCD technologies?

Large form-factor tablets such as the iPad, as well as smaller 7.x-in models from various brands, are expected to get a 56 percent annual increase in shipments of the tablet display market this year. This is according to IHS iSuppli, which added that shipments of tablet displays this year are projected to reach 126.6 million units, up from 82.1 million units last year.

The bulk of tablet panel shipments!about 74.3 million units, or 59 percent!will come from the 9.x-in segment, of which the iPad is the uncontested leader. Growth in the 9.x-in tablet panel sector is forecast to be up 35 percent from 55.2 million units in 2011.

TCL Smart TV name

Figure: Worldwide Tablet Panel Display Shipment Forecast (Millions of Units)
Source: IHS iSuppli Research, September 2012

The second-largest size segment for tablet displays this year will be the 7.x-in, currently including those for models such as the Galaxy Tab from Samsung Electronics, the Kindle Fire from Amazon, the Nook Tablet from Barnes & Noble, and other tablet products using the Google Android operating system. Shipments of the 7.x-in tablet display in 2012 will amount to 41.1 million units, nearly double from 20.8 million units last year.

That means the 7.x-in category will control 32 percent of the tablet display space this year, compared to 26 percent in 2011, with the 9.x-in sector this year giving up some portion of its market in the process. And while the 9.x-in segment will continue to lead the tablet panel space this year, the 7.x-in category will be helped by the launch of lower-priced tablets in that size segment, along with what is widely believed will be a product offering from Apple later this year for a smaller iPad.

The rest of the tablet display market in 2012 will be divided between the 8.x-in, with nearly nine percent share, and the 5.x-in, with less than one percent share.

Shipments for tablet displays were down by 20 percent in Q1 due to seasonal trends, with tablet device makers trying to flush out a significant amount of inventory that had built up in 4Q11 in light of slower consumer demand. Tablet panel shipments grew, however, in Q2!the result of inventories getting cleared, and of panel orders coming in for the new tablet launches planned for H2. Total tablet panel shipments in Q2 reached 27 million units, up nearly 30 percent from 21 million units in Q1.

LG Display and Samsung Display were the main suppliers of tablet displays in Q1 with 42 percent and 38 percent shipment market share, respectively. Both are market leaders because they make LCD panels that are used in the iPad, which continued to dominate the media tablet space with a commanding 58 percent of all tablets shipped in Q1.

Aside from supplying Apple, LGD also furnishes display panels to Amazon and Barnes & Noble, while Samsung provides panels to Samsung's internal tablet division. Investments are being made by the two major tablet panel suppliers in capacity allocation and technological improvements to supply high-performance tablet panels and to develop wide-viewing-angle technologies such as in-plane switching (IPS) and fringe-field switching (FFS). Both LGD and Samsung Display are also looking to convert amorphous-silicon fabs into making oxide silicon panels to help improve tablet panel resolution, power consumption and overall performance.

To be sure, other LCD panel suppliers are jumping into the fast-growing tablet market. In particular, Japanese suppliers such as Sharp, Japan Display and Panasonic are actively targeting the tablet panel market by dedicating capacity at their Generation 6 and Generation 8 fabs in order to make tablet panels.

Together the capacity allocation this year for small and medium displays by the Japanese is expected to increase 164 percent from last year's levels, reaching 5.5 million square meters in 2012. Of particular interest is the oxide silicon capacity at Sharp, which has been supplying panels from its G8 fab for the latest iteration of the iPad!also called the new iPad. Another company, Panasonic, is likely to produce 7.x-in and 8.x-in tablet panels in H2.

For their part, LCD suppliers based in Taiwan such as AU Optronics and ChiMei Innolux are reportedly adjusting their business models!some to focus on tablets for the education sector, and others to supply tablets for the white-box market in China.

But unlike Tier 1 tablet display makers LGD and Samsung Display, Taiwan panel suppliers primarily target the Chinese market that is geared more toward lower-priced tablets. To meet lower price points, display specifications are usually dialed down compared to Tier 1 products. Displays targeted at the white-box tablet market in China mainly use the more basic twisted nematic (TN) LCD, not the wide-viewing-angle LCD technologies of IPS and FFS.

Regardless of the display technology and market segment, display suppliers are making sure they align their strategies to serve this fast-growing market.

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