Global large-sized panel shipments jumped by 7.9% QoQ to 1.68 million units
Overall Panel Shipment Review for 4Q10
Following the weaker-than-expected seasonality in the traditional strong third quarter, the large-sized panel shipments regained their upward momentum in 4Q10, as panel prices bottomed up during the quarter. In contrast to 3Q10, shipments were up by 7.9% QoQ to 168 million units. On an annual basis, they increased by 14.1% YoY, surpassing the previous high point of 164 million units that was recorded in 2Q10. The quarterly shipment growth in 4Q10 was attributed to the large-scale utilization rate reductions and lower demand from clients, which helped clear away the overly high inventory problems that occurred throughout the supply chain in 3Q10. Meanwhile, sharp panel price falls were seen in 3Q10 caused by the sluggish market demand. IT panels further fell past the cash cost level in early 4Q10. The limited room for further declines and the anticipation from clients that prices have reached a low point helped stimulate the panel demand.
Table 1: TFT-LCD Panel Shipment in 4Q10 (K units)
Among the three main applications, following the downstream clients’ preparations for China’s National Day holidays and year-end Christmas sales, the TV panel demand in 4Q10 was underpinned by the inventory pull-in for the Chinese Lunar New Year holidays and planned launch of new models during spring. But as the Christmas sales period in Europe and the US were not too strong, it still weakened the overall TV panel demand, resulting in its panel shipments to fall by 3.1% over the previous quarter. By contrast, as monitor panel prices bottomed up in 4Q10, panel makers started to sharply raise their utilization rates. The increased output led to monitor and notebook panel shipments going up respectively by 12.4% and 6.7% QoQ. Amid market expectations that the tablet PC will see robust growth in 2011, brand vendors were busy preparing the launch of relevant products. Thus, the 12.1” netbook and tablet PC panels experienced explosive growth in 4Q10, which was most notable in the netbook segment. As several Tier 2 and 3 white brand makers launched relevant tablet PC products, it spurred the originally sluggish netbook demand to jump by 28.1% QoQ in 4Q10. Finally for tablet PCs, the hot sales of Apple’s iPad around the globe and panel makers’ development of various panel sizes with wide-angle viewing technology that are used in other branded tablet PCs, resulted in its shipments to soar by 58.8% QoQ.
TV panel shipment
In 4Q10, the global LCD TV panel shipments reached 52.7 million units, down by 3.1% QoQ, but up by 16.4% compared to the same period of last year. During the first three quarters of 2010, TV panel shipments continued to trend upwards. Yet, due to the lackluster end market sales during the Christmas sales season, TV panel shipments started to slow in 4Q10. Although the fourth quarter is usually the traditionally strong selling season, with the retail price still the key concern to consumers, the notable price difference between LED and CCFL TVs, rendered LED TV sales to be worse-than-expected. The LED panel market penetration growth in 4Q10 was stagnant. Size-wise, the shipment ratio of the 26” and below TV panels edged down from 23.6% to 23.5%. For the 32” and larger sets, the shipment ratio of the 32” rose from 40” to 41.4%, the 37” was up from 4.9% to 6%, while the 40” and above fell from 31.5% to 29.2%.
Monitor panel shipment
In 4Q10, monitor panel shipments reached 52.1 million units, up respectively by 12.4% QoQ and 5.7% YoY. As the panel price of the below 20” monitor panels was the first to hit bottom, it stimulated the downstream clients to pull-in more inventory. Their shipment ratio jumped by 4.2 percentage points, rising from 52.5% to 56.7%. Meanwhile, the demand rebound in the commercial market drove up shipments of the 17”, 18.5”W and 19”W to respectively rise from 6.9%, 18.4% and 17% to 7.6%, 20.4% and 19%. Finally, in the 20”W and above segment, the 22”W fell from 7.1% to 5.8%, the 1.3 percentage point drop was the highest among the group.
Notebook panel shipment
In 4Q10, the notebook and netbook panel shipments grew respectively by 6.7% and 28.1% to 43.8 million and 11.46 million units. On a YoY basis, the former increased by 6.4%, while the latter slipped by 3%. Meanwhile, tablet PC shipments grew by a whopping 58.8% QoQ to 8.3 million units. This is an indication that the iPad wave initiated by Apple in 2010 will likely continue in 2011, thereby underpinning the strong demand for below 12.1” panels.
In the NB portion, a weak panel demand was seen in 3Q10, due to inventory problems at the downstream client’s end. In 4Q10, as panel prices hit the bottom, and clients started to build up their inventory for the planned launch of new models in 2011, it boosted the NB panel shipments to rise by 6.7% QoQ. Size-wise, as the below 12.1” panel shipment ratio jumped from 25.7% to 31.1%, despite increased shipments in the 12.1” and above segment, the latter’s ratio still fell. Particularly, although the 15.6”W shipment ratio still stood at 33.7%, it fell by 1.2% QoQ. Meanwhile, the 14.0”W slipped from 18.4% to 16.4%.
Regional TFT-LCD Panel Shipment
Region-wise, as the panel demand increased in 4Q10, Taiwan’s panel makers swiftly raised their utilization rates. Yet, the temporary labor and material shortage during the initial period more or less impacted the island’s panel shipments. Thus, its growth was slightly lower than its Korean counterparts. Taiwan’s shipment ratio fell from 40.8% to 39.1%. Only the Monitor segment experienced an increase, rising from 44.3% to 45.8%, once again surpassing the Korean suppliers. Meanwhile, the Korean panel shipment ratio rose from 51.3% to 53.7%. This was due to three factors. (1) The Korean panel makers owned a better competitive edge in the panel products and client structure of NBs and TVs. (2) The less drastic panel production cuts in the end of 3Q10 placed them in a better position to respond to the 4Q10 market rebound. (3) Large output of tablet PC panels. Turning to Japan’s Sharp, due to the equipment upgrade of their production lines, the reduced panel output led to their TV panel shipments slipping from 9.4% to 8.4%. Finally, Chinese panel makers were essentially slower in their production adjustments. Amid considerations of both production scale and cost, only the netbook portion witnessed a 1% market share increase. The ratio of all the other applications trended downwards.
Table 2: Regional TFT-LCD Panel Shipment (unit base)
Panel ASP
Despite an improvement in the panel demand in 4Q10, the IT panel prices did not simultaneously exhibit a strong rebound, as they remained near the cash cost level. Due to the continued TV panel price decline, the panel ASP by unit fell by $12, down from $216 to $189. The overall ASP dropped by 15%, slipping from $115 to $97. Separately, for the panel ASP by area, each square meter declined by 8.8%, falling from $627 in 3Q10 to $572 in 4Q10.
