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LCD Panel Shipments Show Q1 Declines

5/11/2011 03:44:15 PM Eastern
Santa Clara, Calif. - Large-area TFT LCD panel (larger than 9.1 inches) shipments during the first quarter 2011 fell 7 percent quarter to quarter and 5 percent from a year ago to 164 million units, according to DisplaySearch.

Revenues for the quarter dropped 12 percent quarter to quarter (Q/Q) and 19 percent from a year ago (Y/Y) to $17.5 billion, the firm said.

LCD panel manufacturers are targeting an aggressive 18 percent shipment growth the second quarter, DisplaySearch said, as panel demand increases due to low inventories in the supply chain and as capacity utilization rates gradually rise.

"The TFT LCD industry has been experiencing an over-supply for more than 12 months and Q1'11 is viewed as rock bottom of this cycle, a result of shipment declines, falling panel prices, and suppliers reducing capacity utilization rates due to a lack of orders and inventory reduction. Excess shipments of LCD TV panels in 2H'10 were the major cause for such a long period of oversupply," said David Hsieh, Vice President of Greater China Market for DisplaySearch. "However, panel prices started to stabilize at the end of the quarter," Hsieh added.

DisplaySearch research shows the over-supply situation started to change at the end of March. Reflecting the tightness, the industry is experiencing price increases for several mainstream sizes. TFT LCD capacity utilization is recovering, along with the panel price increases, and the aggregation of targets shows 18 percent Q/Q shipment growth for Q2'11.

Hsieh warned, "The forecasted 18 percent Q/Q growth in Q2'11 might be too aggressive because the current tightness is mostly resulting from supply constraints rather than strong demand. LCD panel manufacturers will need to see whether panel orders continue to increase based on optimism for the second half of the year."

All applications experienced Q/Q decline except public display panels, which were flat, DisplaySearch said. Tablet and mini-note PC panel shipments fell 7 percent Q/Q, LCD TV suffered the largest Q/Q decline of 13 percent, and LCD monitor panels fell by 5 percent Q/Q.

Since Q3 '10, prices for LCD monitor and notebook PC panels have been falling continuously, finally experiencing some stabilization in March.

Due to component constraints and production issues, 9.7-inch tablet PC panel shipments declined Q/Q, from 8.2 million units in Q4 '10 to 7.4 million units in Q1 '11.

On a revenue basis, all applications experienced Q/Q declines due to falling panel prices in Q1 '11.

LCD TV had the worst decline, falling 17 percent Q/Q and 22 percent Y/Y.

Thanks to growth in tablet PCs, the mini-note/tablet segment was the only application showing Y/Y growth. However, as a result of panel price increases in Q2 '11, and increasing shipments, panel makers are now targeting 22 percent revenue growth in Q2 '11.

In Q1 '11, LG Display continued its leadership in revenue terms with 25.9 percent, but its share declined from 27.9 percent in Q4 '10. Samsung Electronics ranked second on a revenue basis with 25.6 percent, an increase from 25.2 percent in Q4 '10. AUO and Chimei Innolux both increased their revenue shares in Q1 '11, from 15.1 percent to 16.5 percent and from 14.1 percent to 15.6 percent, respectively. Sharp ranked fifth, with 7.9 percent, down from 9.8 percent in Q4 '10.

The Advanced LED version of the Quarterly Large-Area TFT LCD Shipment Report covers the entire range of large-area panels shipped worldwide and by region, with LED-backlit panels featured.

For more information see DisplaySearch's Quarterly Large-Area TFT LCD Shipment analyzes for historical shipments and forecast projections.
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