Shipments in January showed a stronger than usual traditional weak seasonality; LCD TV panel shipments recorded 13 consecutive months of growth
According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9-inch and above) added 0.5% MoM to 50.38 million units in January 2010; its YoY performance was a sharp 125.6% increase compared to the same period last year when the industry was impacted by the financial downturn. In January, driven by demand from Chinese New Year (CNY) holiday sales, TV shipments continued to boom. Additionally, as LCD monitor panel prices hiked, downstream customers have been replenishing their inventory aggressively. Hence, overall shipment in January continued to grow. However, panel capacity is still limited by the short supply of upstream components, such as glass substrates, polarizers, and IC, as well as labor shortage in China during CNY. These factors led to the short supply of panels, which stimulated the continued increase in panel price.
Looking at shipments of the 3 main applications: First, total shipment of TV panels rose by 2.0% MoM and 130.2% YoY to 15.43 million units – this positive performance was mainly because China government expanded the scope of its electronic product subsidies, and downstream customers restocked early in preparation for the Chinese New Year holiday sales. Second, monitor panel shipments inched up by 1.4% MoM and 106.6% YoY to 18.17 million units; the growth is driven by inventory replenishment of monitor panels, triggered by the price rebound. Third, notebook panel shipments declined by 1.8% MoM to 16.77 million units. This is because shipment momentum slowed as the effect of Windows 7 launch gradually weakened. However, on an annual basis, notebook panel shipments rose by 145.4% YoY.
Table 1: TFT-LCD Panel Shipment in Jan-10 (K units)
The aggregated area shipment in January added 0.8% MoM, from 8.614 million square meters to 8.686 million square meters; and a sharp increase of 120.5% YoY. Of the 3 applications, shipments monitor panels rose by 2.6% MoM to 2.193 million square meters; shipments of TV panels added 0.9% MoM to 5.511 million square meters; whereas shipments of notebook panels slid 3.0% MoM to 982 thousand square meters.
Table 2: TFT-LCD Panel Area Shipment in Jan-10 ( K square meter)
LCD TV Panels
Global TV panel shipments rose by 2% MoM to 15.43 million units in January, and a sharp 130.2% increase YoY. Thanks to continued restocking in preparation for CNY sales, TV panel demand demonstrated strong growth momentum. Size-wise, ratio of 26’’ and below TV panels slid by 1.6%; mainstream 32"W rose by 2.3%, accounting for 41.6% market share; ratio of 40”W and above panels fell by 1.3%, accounting for 28.5% of the total.
Notebook Panels
Notebook panel shipments (including the 8.9” and above) declined by 1.8% MoM to 16.77 million units in January; the figure rose by 145.4% YoY. Panel shipment momentum declined as the effect of new model upgrades gradually weakened. In particular, shipments of 17.3”W decreased most significantly by 1.8%, while shipments of the mainstream 15.6”W added 0.8% compared to Dec’09, accounting for 33.3% of total notebook panel shipments. Shipments of 10.x”W was the second largest with 19.7%, up 0.5%; followed by 14.0”W, which increased by 1.9% increase, the largest increase in January.
LCD Monitor Panels
In January, global monitor panel shipments rose by 1.4% MoM to 18.17 million units; YoY growth rate reached 106.6%. Triggered by the drastic price rebound, downstream customers’ aggressive inventory replenishment spurred the growth of monitor panel shipments. Size-wise, those that increased in ratios were 20”W (+0.8%), 21.5”W (+1.0%) and 23”W (+0.7%). On the other hand, ones that declined were 17”W (-1.1%), 19” (-0.7%), and 19”W (-2.2%). On the whole, ratio of the 16:9 segment added 3.4%, while that of 16:10 and square model declined by 2.8% and 0.6% respectively.
Conclusion
At their respective 4Q09 inventor conferences, panel makers expressed their optimistic outlook toward 1Q10 as the market is in a stronger than usual traditional weak seasonality. The optimism also extends to the sales performance during CNY. Based on their projections for panel shipments in March, panel makers may be able to maintain the same shipment performance as that in 4Q09. After panel price rebounds, panel makers will likely achieve pleasing earnings performance in 1Q10.
2009 Review
After the TFT-LCD industry escaped the financial turmoil in 2H08, the industry boomed again in 2009 – global large-sized panel shipments reached a total of 503 million units, a 20.9% YoY growth compared to the 4,160 million units in 2008. TV panel shipments recorded the biggest increase among the 3 main applications, reaching 143.5 million units in 2009, a 47.3% surge compared to 2008; notebook panel shipments grew by 23.9% YoY to 172.9 million units; monitor panel shipments rose by 4.2% to 187 million units.
All applications demonstrated explosive growth in 2009, especially shipments of TV panels. Stimulated by China’s strong domestic demand, TV panel shipments have been posting record high figures for consecutive months since January 2009. Notebook panel shipments benefitted from the launch of Windows 7 OS, brand vendors’ new models drove up notebook panel shipments. As for monitors, downstream customers were concerned about the impact of the financial downturn in 2H08 and strictly controlled their inventory levels. In 1Q09, under aggressive inventory replenishment, as well as market demand recovery, monitor panel shipments demonstrated a growing trend in 2009.
Table 3: TFT-LCD Panel Shipment in 2008 and 2009 (K units)
In terms of unit shipment market share, Korean makers dominated the market with 50.9% market share in 2009, with Samsung and LGD taking the No. 1 and No.2 positions with 25.5% and 25.4% respectively. Korean makers’ shares outpaced the 42.3% from Taiwan makers; market shares of AUO and CMO were 17.1% and 14.8% respectively. Compared to 2008, panel makers with market share increases were: Samsung (+2.9%), LGD (+3%), and Innolux (+0.9%); while ones that declined were AUO (-2.2%) and CPT (-2.9%). For Taiwan panel makers, there is still room for improvement. In the year ahead, the merger of Chi Mei and Innolux is bound to bring about changes in the market dominance of the panel industry.
Table 4: TFT-LCD Panel market share in 2008 and 2009 (K units & %)
Having undergone the market volatility in 2008 and 2009, panel makers have become more cautious about managing the overall supply and demand. In terms of individual panel makers’ competitiveness, the depreciation of Korean makers’ G7 fabs is complete, and thus their cost and quotation will be more competitive and aggressive compared to other panel makers. Additionally, after the merger of Chi Mei and Innolux, the competition and cooperation between panel makers and their customers are bound to have an impact on the market dominance. It is estimated that a total of 8 fabs will be in operation in 2010, including the newly setup ones and those that resumed operation; 4 of which are G8.5. Furthermore, taking into account the non-fully-loaded capacity, an issue of panel oversupply may emerge. Hence, effective capacity control will become a key element in stabilizing the market. Finally, as panel demand benefited from the gradual recovery of the global economy, China’s strong domestic demand, and demand for product upgrades, the market holds an optimistic outlook toward 2010.
