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Q3 Large-Area TFT Shipments and Revenues Fell as Supply Chain Sought Inventory Reductions

Tue, 11/09/2010 - 5:26am
General Electric

Q3 Large-Area TFT Shipments and Revenues Fell as Supply Chain Sought Inventory Reductions

LED Backlight Penetration in LCD TV Panels Reaches 26% in Q310

SANTA CLARA, Calif., November 9, 2010Shipments of large-area TFT LCDs over 9.1 fell to 163 million units in Q310, with 4% Q/Q decline, but 7% Y/Y growth. Revenues reached $21.3 billion, down 7% Q/Q, but up 7% Y/Y. According to the latest Quarterly Large Area TFT LCD Shipment Report, panel makers are targeting just 3% shipment growth in Q410,  as the capacity utilizations have been in a controlled range due to the slow demand in the end market and supply chain inventory adjustments.

The TFT LCD industry experienced an oversupply in Q310, and as a result, shipments declined, panel prices fell and suppliers  reduced capacity utilization rates due to the lack of orders and inventory reduction. However, even as overall shipments decline, LED-backlit panel shipments are still growing, continuing the industrys irreversible trend toward LED, noted David Hsieh , Vice President, Greater China Market, DisplaySearch.

Hsieh added, The Q310 performance results are partly due to over-optimism and over-stocking in Q210. Looking forward to Q410, panel prices, inventories and capacity utilization have all fallen to lower levels. Despite this, the TFT LCD industry is expected to overcome these tough challenges by the end of the year.

In terms of demand by application, monitors and notebook PCs experienced Q/Q declines, but LCD TV and slate PC applications continued to grow in Q310. Notebook PCs suffered the largest Q/Q decline of 14%, while monitors fell by 8% Q/Q. Panel prices for both applications fell drastically from July to October, and only started to see some stabilization in November. Mini-note/slate PCs grew by 8% Q/Q, thanks to soaring 9.7 panel shipments, which increased from 3 million units in Q210 to 5.6 million units in Q310.

LCD TV panel shipments grew in Q310, despite the oversupply situation because of spot deals for brands who are looking to holiday promotions to reduce inventories, especially on 40+ and LED models. Shipments of 40 and larger LCD TV panels grew from 16 million units in Q210 to 18.1 million units in Q310. Among them, LED panels grew from 5.8 million units in Q210 to 7.8 million units in Q310.

Table 1: Q310 Large-Area TFT LCD Shipments by Application (Millions)

Application

Q309

Shipments

Q210

Shipments

Q310

Shipments

Q/Q

Growth

Y/Y

Growth

LCD Monitor

49.6

50.9

46.6

-8%

-6%

Notebook PC

41.8

48.9

42.1

-14%

1%

Mini-Note/Slate

10.7

12.3

13.3

8%

24%

LCD TV

46.3

55.0

57.4

4%

24%

Public Display

0.3

0.4

0.4

-12%

17%

Others

3.1

2.7

3.1

16%

1%

Total

151.9

170.2

163.0

-4%

7%

Source: DisplaySearch Quarterly Large-Area TFT LCD Shipment Report

In Q310, Samsung Electronics and LG Display nearly tied for market share leadership on a revenue basis, capturing a 26.0% and 25.9% revenue share, respectively, and sales of $5.5 billion. AUO was third at $3.4 billion with a 16.1% share. Chimei Innolux followed with a 14.0% share (down from 15.7% in Q210) at $3.0 billion.

DisplaySearch tracks LED-backlit LCD panel shipments by size, resolution, panel supplier, and LED type. Of the $21.3 billion in large area TFT LCD revenues in Q310, LED-backlit panels accounted for 44%. This is a big jump from 37% in Q210. On a unit basis, 77 million LED-backlit panels shipped in Q310, a 6% Q/Q growth from Q210. The total penetration of LED backlights increased to 47.2%, from 42.7% in Q210. In Q310, LED backlight penetration was 21% in monitors, 93% in notebook PCs, 100% in mini-note/slate PCs, and 26% in LCD TV. LG Display was the leading LED-backlit LCD panel supplier in Q310.

Table 2: Top Three LED Panel Suppliers for Each Application in Q310   

Rank

LCD Monitor

Notebook PC

Mini-Note/Slate

LCD TV

Public

Display

Total

1

LG Display

LG Display

LG Display

LG Display

Sharp

LG Display

2

AUO

Samsung

Samsung

Samsung

Samsung

Samsung

3

Chimei Innolux

AUO

HannStar

Sharp

N/A 

AUO

Source: DisplaySearch Quarterly Large-Area TFT LCD Shipment Report

Looking forward, panel makers are targeting shipments of 168 million units in Q410, which would amount to a 3% Q/Q growth. But for LED-backlit LCD panels, panel makers are aiming to grow shipments by 12%. However, expected total large-area TFT LCD revenues will decline by 9% in Q410 due to price erosion in LCD TV panels. In the meantime, LED-backlit LCD panel revenues are expected to fall by 2%, despite the strong expected growth in shipments. This is based on the fact that, in TV applications, price reductions in LED-backlit panels are more severe than for CCFL-backlit panels due to the shrinking LED premium.

About DisplaySearch

Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with the NPD Group, its parent company, DisplaySearch uniquely offers a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on DisplaySearch analysts, reports and industry events, visit us at http://www.displaysearch.com/. Read our blog at http://www.displaysearchblog.com/ and follow us on Twitter at @DisplaySearch.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit http://www.npd.com/ and http://www.npdgroupblog.com/. Follow us on Twitter at @npdtech and @npdgroup.

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