Strong first half for tablet PC panel shipments, but slowdown expected
According to the Monthly Tablet PC Panel Shipment & Value Chain Report, tablet PC panel shipments reached 30 million in June 2014, the highest level since December 2013. Tablet PC panel shipments for 1H’14 reached 157.4 million, up 15% Y/Y. For the full year, however, we forecast that tablet PC panel shipments will reach 316 million in 2014, only 2% growth Y/Y.
In 1H’14, the tablet PC market struggled with the challenges of a mature market. Even big brands with aggressive promotions, like Apple and Samsung, found it difficult to achieve good growth in their tablet PC businesses. Even white box tablet PC players are finding this a challenging market, and many Chinese supply chain companies have retreated from tablet PCs. The current situation has affected panel makers such as BOE, CPT, Innolux, and HannStar, prompting them to focus on customers other than top-tier brands.
BOE continued to lead in tablet PC panel shipments. In 1H’14, BOE shipped 29% of all tablet PC panels, followed by Samsung Display and CPT with 15% each, LG Display with 13%, and AUO with 9%. The company successfully expanded its tablet PC customer base with customers like Samsung Galaxy tab, Lenovo, and ASUS. Furthermore, BOE has developed a new panel production model called quarter-cut, in which they produce tablet PC panels on larger fabs such as Gen 6 and Gen 8 and cut the substrate into four segments in open cell form, which are then shipped to set makers who integrate their own backlight modules. This enables BOE to efficiently ship large volumes of tablet PC panels; along with CPT, BOE is the largest white box tablet PC panel supplier.
In the value chain, each brand has an established purchasing position with a certain panel maker. For example, AUO is the key supplier for ASUS, Innolux supplies Acer, LG Display supplies Apple, Samsung Display supplies Microsoft, BOE supplies Lenovo, and JDI supplies Google. In 1H’14, Apple purchased 30% of its tablet PC panels from Samsung Display and 54% from LG Display. These relationships change regularly, as shown in the Monthly Tablet PC Panel Shipment & Value Chain Report.
Figure: 1H’14 Tablet PC Panel Shipment Shares
Source: NPD DisplaySearch Monthly Tablet PC Panel Shipment & Value Chain Report