Large-sized Panel Shipments Continued to Increase; Only IT Panel Demand Remained Weak
According to the latest survey by WitsView, the research division of TrendForce, large-sized panel shipments increased by 3% MoM to 53.34 million units. Under the expectation of imbalance supply and demand, downstream vendors restocked early in preparation in 2Q10, leading to the continued growing inventory level in slow season. As a result, panel prices extended the downtrend in 3Q10. Panel makers had to reduce the glass input to lower the inventory level under the pressure of declining profit. Nevertheless, the global economy encountered a slow recovery. The end market demand remained weak, so downstream vendors were not able to clear away the inventory efficiently, leading to the weaker panel demand. Compared to a 17% QoQ growth in panel shipments in 3Q09, the shipments went down by 5% QoQ in 3Q10. In other words, panel shipments in 3Q10 posted a weaker hot season.
Of five applications, thanks to booming sales of Apple iPad, panel makers continued to expand the supply of tablet panels, leading to a substantial 12.4% MoM growth to 2.13 million units in tablet panels. LCD TV panel shipments was sustained by demand from China National Day holiday and the Christmas hot season; additionally, since the profitability level of TV panel was better than that of IT panels, panel makers hoped to increase TV panel shipments to compensate the loss from IT panels. As a result, LCD TV panel shipments rose by 5.7% MoM in September to 19.06 million units. In terms of IT panels, due to the continued weak demand from customers, monitor panel shipments dipped by 0.9% MoM to 15.12 million units; notebook (≧12.1-inch) panel shipments grew by 1.3% MoM to 13.82 million units while netbook (<12.1-inch) panel shipments increased by 8.7% MoM to 3.21 million units.
Table 1: TFT-LCD Panel Shipment in Sep-10 (K units)
In September, the aggregated shipment area rose by 6% MoM to 9.98 million square meters. Of individual applications, tablet panel shipment area reached 68 thousand square meters, growing by 12.4% MoM; TV panel shipment area increased by 8.5% MoM to 7.02 million square meters; notebook (≧12.1-inch) panel shipment area added by 1.2% MoM to 909 thousand square meters; netbook (<12.1-inch) shipment area increased by 1.5% MoM to 103 thousand square meters; monitor panel shipment area dipped by 0.8% MoM to 1.879 million square meters.
Table 2: TFT-LCD Panel Area Shipment in Sep-10 (K square meter)
Size Wise
LCD TV panels
In September, shipment ratio of ≦26”LCD TV panels fell by 1.7% MoM to 22.8% from 24.5%. Among which, shipment ratios of 21.5”/21.6”W, posted the most substantial decrease by 2.9%. The shipment ratio of 32”W remained at 39.3%. Since large-sized TV panel prices recorded a further decline which spurred panel shipments, the overall shipment ratio of ≧40”W increased from 31.3% to 33.0%; of which 40”/42”W grew by 0.7% while 46”/47”W rose by 1%.
Notebook panels (including tablet PC panels)
In September, the global <12.1”W netbook and ≧12.1”W notebook panel shipment ratios are as follows: 15.6”W fell from 36.0% to 33.9%; 14.0”W dropped from 16.5% to 15.8%; 17.3”W increased by 0.6% moderately to 4.4% from 3.9%. 16:10 shipment ratios rose to 12.7% from 11.7% because demand in commercial market became slightly stronger. 9.7”was the current mainstream size in tablet PC panels, growing by 0.9% MoM.
LCD monitor panels
The shipment ratios of the global LCD monitor panels in September, 18.5”W fell by 0.9% MoM to 18.3% from 19.2%; 19”W increased from 16.9% to 17.7%; 21.5”/21.6”W rose from 12.9% to 15.2% while 20”W was down from 10.0% to 9.4% becuase 20”W price decline was relatively flat, leading the demand to shift toward 21.5”/21.6”W and 19”W.
Conclusion
WitsView pointed out that since the pressure of financial loss extended, and reduction of input capacity started to take effect, panel makers intended to stabilize the prices after IT panel prices fell below the cash cost. However, the message did not mean that customers’ product pull-in became stronger, and it was just another strategic manipulation under psychological effects. Due to the high inventory level at downstream, the overall demand was constrained by the inventory problem and remained weak even though the supply in some sizes became tight from the decreasing supply. Since the distribution for the year-end hot season gradually came to the end, TV panel demand may turn weaker. The pressure of high inventory level among panel makers gradually went down after the capacity adjustment in 3Q10, yet it has not returned to the healthy level. Entering 4Q10, WitsView indicated that panel makers continued to control the input capacity, coupled by the sales performance at end market are the keys to sustain the panel prices.
