Large-sized panel shipments slip by 16.9% MoM to 22.23 million units in January 2009
According to WitsView’s survey, global large-sized panel shipments (including the 8.9” and above) reached 22.23 million units, down by 16.9% MoM and a staggering 33.5% YoY. Looking at the recent industry development, amid the Chinese Lunar New Year holidays, there were fewer working days in January. Coupled by the sharp utilization cuts by the Taiwan, China and Japan panel makers, the average panel inventory levels have been maintained at less than 3 weeks. This has created a situation where not all of the downstream clients’ rush orders can be satisfied now. Nevertheless, the persisting macroeconomic woes continue to push up unemployment rates. The resulting tighter consumer spending remains as a huge obstacle to the downstream market demand. Faced with the unfavorable conditions both from an industry and market standpoint, the low confidence level has made the traditional weak seasonality even weaker.
Among the 3 main applications, IT panels posted a double digit shipment decline. Aggregated shipments of the 8.9” and above netbook plus larger-sized NB panels reached 6.836 million units, down by a whopping 28.5% MoM. Due to the still weak downstream market demand, the shrinking amount of outsourcing orders continued to weigh on the overall supply chain. Meanwhile, monitor panel shipments slipped by 16.8% MoM to 8.694 million units. Despite the influx of rush orders, the market demand visibility remains unclear, thus explaining the still conservative market atmosphere. Finally, in the TV segment, the shipment fall was much more moderate, where it fell by a mere 0.8% MoM to 6.706 million units. The TV panel demand rebound, thanks to brand vendors’ preparations of new model releases and positive market effect from China’s electronic product subsidy program for rural areas helped boost January’s shipment volume.
TFT-LCD Panel Shipment in Jan-09 (K units)
In terms of area shipments, double-digit declines continued, where it slipped from 4.33 million to 3.94 million square meters, down respectively by 9.1% MoM and 26.5 YoY. Amid the increase in the consumption of large-sized TV panels, due to the reasons mentioned in the previous paragraph, the aggregated area shipment decrease did not deteriorate in January. Nevertheless, the MoM area shipments continued to trend downwards for the 3 main applications. For TV panels, they dropped by 1.9% to 2.44 million square meters. Meanwhile, in the monitor and NB segment they respectively declined by 15.2% and 26.2% to 1.06 million and 434 K square meters.
Figure: TFT-LCD Panel Area Shipment in Jan-09 ( K square meter)
TV Panels
In January, TV panel shipments reached 6.706 million units, down by a mere 0.8% MoM. Size-wise, the 26”W and below shipment ratio grew by another 2.9 percentage points. This mainly stemmed from the small-sized Moni-TV growth, pushed up by the promotion of the 19”W, 22”W and 26”W under China’s aforementioned subsidy program. Meanwhile, spurred by the attractive pricing, the mainstream 32”W continued to maintain a more than 40” shipment ratio, where it reached 42.6%. Separately, the 37”W witnessed a 1.3% shipment ratio, due mainly to the inventory clearing. Finally, limited demand resulted in the 40”W and above panels to slip by another 1 percentage point.
NB Panels
The aggregated NB panel shipments (which included the 8.9” and above) in January reached 6.83 million units. Despite the addition of the currently highly popular Netbook products, aggregated shipments still fell respectively by a whopping 25.8% MoM and 33.4% YoY. The sharp fall shows the NB panel demand remains stagnant. Size-wise, as the mainstream Netbook size moves toward the 10.X”W category, the shipment ratio of the 8.9”W fell by 6.2 percentage points, while the 10.X”W grew by 2.3 percentage points. On a different note, given the planned launch of new models in 1H09, which will adopt LED backlights and new 16:9 display ratio, sizes that experienced more notable growth in January included the 12.1”W, 14.1”W, 16”W.
Monitor Panels
Factors which included the fewer working days, lower utilization rates and inventory of panel makers and the fact that they can not withstand further losses, monitor panel prices finally hit bottom in January, thereby creating the atmosphere for a forthcoming increase. Yet, hampered by the slow seasonal demand, monitor panel shipments fell by 16.8% MoM to 8.69 million units. On a yearly basis, it was an equivalent to a 44% drop. Size-wise, as some panel makers have aggressively moved toward the production of new 16:9 sizes, the original 4:3 or 16:10 shipment sizes fell by an average of 0.5~1%. Meanwhile, the large production cutbacks by suppliers resulted in a bigger 19” and 22”W shipment drop.
Looking into 1Q09, amid the uncertain market demand visibility, most panel makers are conservatively meeting the panel order demand of clients. They continue to strictly control their inventory and minimize their risks in maintaining business. Beginning from February, aside from paying attention to the subsequent global economic changes, another key observation point is the market development of the new spring model releases and spending stimulus plans of different regions. For example, China’s consumer electronics and PC subsidy program for rural areas are projected to provide a certain positive boost to the panel market.
