Large-sized panel shipments decreased sequentially by 8.4% to 35.5 million in June—Monitor segment experienced notably down by 12.5%
According to WitsView’s survey, worldwide large-size panel shipments in June reached 35.5 million units, an 8.4% MoM decrease and a 13% growth on year. For 2Q08, shipments totaled 110.8 million units, up quarterly by 7%. As June simultaneously marked a quarterly end and the mid-year inventory accounting, both the seller and buyer were under accounting and inventory pressures. Panel orders were cut by some of the brand vendors in June, despite panel makers trying to secure orders via price reductions. The average panel price drop during June was between 2~3%. During 1H08, given the limited capacity increases and anticipation of panel prices rising again in the second quarter, downstream clients pulled-in their inventory earlier, resulting in stronger-than-expected panel shipments. However, as the retail channels were impacted by rising oil prices, inflation problems and the credit squeeze crisis, the end market was essentially weak. This had led to a build-up in inventory throughout the whole supply chain. Due to the higher inventory levels, brand vendors and SI makers experienced a tighter cash flow. Meanwhile, amid the lower-than-expected panel consumption, after a mere 2-month panel price increase, that began in April, they started to trend downwards again in June. Shipment-wise declines were seen in all three applications. The most notable drop occurred in the monitor segment, where it fell by 12.5% to 15.9 million units. Meanwhile, TV and NB panels were respectively down by 2.8% and 6% to 7.8 million and 11.7 million units.
Figure: TFT-LCD Panel Shipment (K units)
|
Application
|
May-08
|
Jun-08
|
MoM
|
|
TV
|
8,074
|
7,847
|
-2.8%
|
|
Notebook
|
12,477
|
11,730
|
-6.0%
|
|
Monitor
|
18,183
|
15,912
|
-12.5%
|
|
TTL
|
38,734
|
35,489
|
-8.4%
|
The aggregated large size panel area shipments in June reached 5.5 million square meters, down 6.8% MoM and up 22.5% YoY. In the 3 main applications, monitor area shipments were down notably by 12.5% to 1.8 million square meters. TVs and NBs were down respectively by 2.9% and 6.5% to 2.9 million and 804K square meters.
Figure: TFT-LCD Panel Area Shipment ( K square meter)
|
Application
|
May-08
|
Jun-08
|
MoM
|
|
TV
|
2,994
|
2,908
|
-2.9%
|
|
Notebook
|
860
|
804
|
-6.5%
|
|
Monitor
|
2,094
|
1,833
|
-12.5%
|
|
TTL
|
5,949
|
5,545
|
-6.8%
|
TV panels
In June, TV panel shipments reached 7.8 million units, down by 2.8% MoM and up by 19.2% YoY. Compared to the evident impact on IT panels from the downstream makers’ inventory adjustments, TV panels only experienced a small shipment decline. Size-wise, the 26”, 32” and 37” still accounted for roughly 50% of total shipments. Meanwhile, in the 40/42” segment, despite the overall TV shipment drop, the two sizes instead saw an increase. Amid the aggressive sales promotions by brand vendors, the 40” even witnessed a 19% MoM growth. The combined shipment ratio of the 40/42” reached 20%. As for the larger-sized 46/47”, due to the weak global economy, consumers are shifting their interest to smaller-sized or cheaper TVs. Thus, the demand for high-end larger sized TVs has not been in line with the panel capacity increases. For June, the 46/47” panel shipments fell by more than 20% MoM. The TV shipment screen size breakdown can be seen in the figure below.
Mionitor Panels
The aggregated monitor panel shipments in June reached 15.9 million units, down by 12.5% MoM and up by 2.3% YoY. Due to the sluggish demand for small to medium-sized panels in 1H08, some of the freed up capacity from the G5 and below shifted to IT panels. The supply of either monitor or NB panels has become very sufficient. However, due to the earlier accumulated inventory, the aggressive adjustments by the downstream clients resulted in a evident IT shipment drop. This was particularly notable for the 19”W, where it fell by a whopping 25% MoM. Its market share declined sharply from 32.5% to 27.9%. The 17” also saw a 19% sequential drop in shipments, rendering its market share to fall by 1.1 percentage point to 13.9%. Separately, AUO has begun mass producing the 18.5”W (16:9) and 21.5”W (16:9) in June. Other 16:9 widescreen monitor displays are scheduled for production during 2H08. The monitor shipment screen size breakdown can be seen in the figure below.
NB Panels
In June, NB shipments reached 11.7 million units, down by 6% MoM and up by 26.6% YoY. Again, the shipment drop was due to the downstream clients’ inventory adjustments. But compared to the monitor panels, the rate of decline was more moderate. This is attributed to the NB’s higher profit margins over monitors. Moreover, the NB segment is considered a more customized business. Whenever, a panel make becomes one of the suppliers in the NB vendor’s supply chain, it is usually long-term, as the NB panel sources are harder to replace than monitors. Thus, panel makers face a smaller risk in seeing clients switch orders. For June, sharp shipment declines were seen, where the 9% drop of the 15.4” was the most evident. Meanwhile, beginning from June, CMO started mass producing the 15.6”W (16:9). The NB shipment screen size breakdown can be seen in the figure below.
Conclusion
It is expected that the sharp panel price drops in July should help stimulate the end market demand in the second half. Coupled by the expected rising LCD TV demand in 3Q08, it should help ease the current panel oversupply. However, amid the negative external factors, the speed in removing the excess inventory will be a key factor as to when and how strong the market rebound may be. Looking into July, IT panel shipments should be roughly the same as in June. For TVs, a 5~6% growth is expected.
