Large-sized panel shipments falls by 8.2% MoM in Jan11 as traditional hot selling season draws to a close
According to the latest surveys conducted by WitsView, a subsidiary of Trendforce, large-sized panel shipments fell by 8.2% MoM to 52.23 million units in Jan11. As the year-end hot selling season drew to a close, the arrival of the traditional weak seasonality prompted downstream clients to reduce their panel procurement. In addition, the weaker-than-expected sales performance during the year-end sales promotion also weakened their willingness to replenish their respective inventory. These two factors were the key reasons behind the monthly shipment drop in Jan11.
Amid seasonality factors, including the end of the year-end holiday selling season in the US and Europe and the Eco-point subsidy program drawing to a close in Japan, TV panel shipments have begun to weaken in 1Q11. Despite demand stemming from the scheduled launch of new Spring models, the panel supply continues to be disrupted by the labor and raw material shortage that is still being experienced by some panel makers. Impacted by the weak seasonality effect and tight supply conditions, TV panel shipments fell by 11.3% MoM in Jan11. In the IT segment, as clients finish their inventory replenishments, and the fact that there appears to be no evident end market demand, monitor panel shipments also grew weaker, falling by 3.3% over Dec10. Finally, in terms of the NB panels, demand has gradually surfaced for the newer NB platforms. However, as the inventory of the older models still await to be digested, along with designs flaws that have been discovered in Intel’s new Sandy Bridge chipset, panel shipments of the above 12.1” declined by 7.1% MoM. Meanwhile, in the mini-notebook portion, it plummeted by 13.2% MoM.
Having garnered more than 95% of the tablet PC market share in 2010 with the iPad product, Apple is now readying the release of the iPad 2. This has created a transition in the supply of 9.7” panels for Generation 1 and 2 products. Tablet panel shipments were thus affected, falling by 18.3% MoM. However, amid the forthcoming release of Google’s Android 3.0 operating system, the “non-apple” camp, which includes both cell phone and PC brand vendors, will aggressively launch relevant tablet PC products to try to get a bigger piece of the pie. The expected explosive growth of such products is expected to sharply drive up demand of tablet panels in forthcoming quarters.
Table 1: TFT-LCD Panel Shipment in Jan-11 (K units)
Area-wise, the aggregated panel area shipments fell by 8.5% MoM to 8.69 million square meter. Application-wise, tablet panel area shipments slumped by 18.4% MoM to 72 thousand square meter. The below 12.1” mini NB segment slipped by 12.3% MoM to 12 thousand square meter. Meanwhile, the TV, above 12.1” NB and monitor panel area shipments respectively declined by 10.7%, 7.5% and 1.9% MoM to 5.49 million square meter, 904 thousand square meter, and 2.11 million square meter.
Table 2: TFT-LCD Panel Area Shipment in Jan-11 (K square meter)
Size Wise:
TV panels:
The shipment ratio of the small-sized below 26” TV fell from 23.4% in Dec10 to 21.4% in Jan11. The 18.5”W saw a more notable increase, where its ratio rose from 4.2% to 4.8%. For the 32”, its shipment ratio grew from 42.8% to 44.2%, posting a 1.4 percentage point increase. Meanwhile, the 37” fell from 5.3% to 4.2%, while the 40” and above witnessed a 1.7 percentage point increase. In particular, the 40” and 46” posted the highest growth, rising respectively from 9.4% and 5.3% in Dec10 to 12.4% and 6.2% in Jan11.
NB panels (including tablet panels):
Amid the transition between old and new models, shipments of the 9.7” panel evidently dropped in Jan11, thereby causing the below 12.1” shipment ratio to decrease by 2.0 percentage points. Only the 7” and 11.6”saw their respective ratios rise from 0.9% and 2.5% to 1.8% and 3.0%. As for the above 12.1”, they were up from 68.0% to 69.9%. Particularly, the 14.0”W and 13.3”W (16:10) respectively climbed from 17.4% and 3.4% to 19.2% and 4.5%. By contrast, the 15.6”W slipped from 33.9% to 32.6%, down by 1.3 percentage points.
Monitor panels:
Shipments of the below 20”W fell by 2.7 percentage points from last month. In particular, the ratio of the 18.5”W and 19” respectively increased from 20.9% and 6.2% to 22.5% and 6.6%. For the above 20”W portion, the 21.5”/21.6”W, 27”W and 24”W (16:10) evidently grew from 13.3%, 1.2% and 1.2% to 14.8%, 1.9% and 1.7%.
Conclusion
In 4Q10, as mentioned before panel makers began to notably raise their respective utilization rates. In 1Q11, even though demand from downstream clients has weakened, panel makers continue to maintain relatively high utilization rates. Based on WitsView’s assessment, this can be attributed to the following reasons. From a cost standpoint, if the production is sharply cut, it could cause the panel cost to rise too high. Amid anticipations that there will be no substantial panel price drops in 1Q11, panel makers are maintaining current outputs to avoid running the risk of dealing with overly high panel costs, which would further impact their profitability. In terms of supply, some panel makers are in the middle of conducting equipment upgrades on their existing lines. As further fine-tuning is needed in increasing the yield rates, some of the downstream clients have transferred their orders to other panel suppliers. This had helped hold up the panel demand in the short-term for some players. As a matter of fact, the rush order effect has also created a temporary labor and raw material shortage. However, it should be noted that once the manufacturing process upgrades are completed, with no strong end market demand expected in the near future, the supply side may come under heavy pressure. By then, panel makers may be forced to scale back production in order to maintain a better balance in the market supply and demand and hopefully stimulate a market rebound in the near future.
