April large-size panel shipment drops 2.1% MoM to 56.34 million units
According to the latest surveys conducted by WitsView, a subsidiary of TrendForce, large-size panel shipment in April to be 56.34 million units, a drop of 2.1% compared to March.
Entering the traditional low season at the second quarter, global terminal end market still exhibited sluggish demand for LCD TV and consumer electronics, resulting in decline in shipment of large-size panel in April. At the same time, observation of the production and sales plan by downstream brands and ODMs in April also reveals a drop of about 10% compared to March, showing that downstream businesses are slowing their pull of panels at the beginning of the low season after their saw inventory levels increased in March.
In terms of application, although TV sales during the Chinese May Day holiday is relatively stable compared to the same period last year, low clarity in demand of the global major consumer markets in Q2 caused TV panel shipment to slip 3.9% compared to March to 16.37 million. Monitor panel shipment dropped 5.5% MoM to 16.88 million; Notebook panel shipment decreased by 4.3% to 14.7 million units. Tablet PC panel shipment still showed strong performance to record a 17.4% jump MoM to 4.95 million. As netbook market continued to be squeezed by the growth of tablet devices, top-tier brands adjusted their shipment plans for their netbook products while second-tier brands, bound by the limited supply of touch screen panel related components, launch quasi-tablet products to take advantage of the current trend. This led to the increase of shipment of 10.x" netbook panel in April to 3.4 million units, a 11.5% surge compared to March.
Table 1: TFT-LCD Panel Shipment in Apr-11 (K units)
In terms of shipment area, the total shipment area in April reached 9.38 million square meters, a drop of 2.8% MoM. In terms of shipment area in different categories, tablet PC panels recorded a shipment area of 157,000 square meters, which equals to a MoM increase of 21.6%. Shipment area for netbook panel under 12.1" grown 14.2% MoM to 111,000 sq. M. TV panels experienced a 2.1% MoM drop in shipment area to 6.06 million sq. M. Notebook panels over 12.1" saw a 5.4% MoM drop in shipment area to 956,000 sq. M. Monitor panel shipment also dropped 5.7% MoM in area to 2.09 million sq. M.
Table 2: TFT-LCD Panel Area Shipment in Apr-11 (K square meter)
Size Wise:
TV panel: In terms of size changes in TV panel shipment in April, the shipment ratio of small TV under 26" dropped slightly from 22.2% in the previous month to 21%. Change is most pronounced in 22"W products, which jumped from 0.9% to 1.7%; shipment ratio for 32" panels remained at the level in the previous month of 40.5%; ratio for 37" panels dropped slightly from 4.5% to 3.8%. Ratio for panels over 40" increased by 2.1% to 34.8%^, in which 40" and 55" panels saw the greatest jump from 12.1% and 2.7% to 12.7% and 3.3%, respectively.
NB panels (including tablet PC): In terms of size changes in Notebook panel shipment in April, due to the continued volume increase of iPad2’s 9.7" panels since February, the shipment ratio surged significantly from 14.6% to 18.1%. Overall tablet panel shipment ratio also increased by 2.9% from 18.7% to 21.6%. Panels for netbook, on the other hand, saw increased shipment ratio due to the launch of quasi-tablet products from 13.4% to 14.7%. Shipment ratio of panels over 12.1" decreased from 67.8% to 63.7%, in which 14.0" shipment ratio continues to grow from 21.5% last month to 22.3%; in contrast, 15.6"W panels saw ratio dropped by 4.2% from 32.9% to 28.7%.
Monitor panels: In terms of size changes in global LCD monitor panel shipment in April, shipment ratio for panel below 20"W dropped by 0.4% to 62.2%, in which 20"W shipment ratio increased by 2.1% to 12%; for panels over 20"W, ratio increased from 37.4% from the previous month to 37.8%, an 0.4% increase, in which the growth of 21.5"W panels is more pronounced from 15.6% to 16.7%.
Conclusion
Major panel makers have all released their Q1 financial reports recently. Impacted by the low season and the bad general environment that hurt demand and the continue drop in panel prices, Samsung Electronics’ panel department reported its first lost after the global financial crisis. LG Display also recorded its second consecutive loss. Taiwanese panel makers such as AUO, CMI, CPT and HannStar all posted losses in the quarter. Under huge financial deficit pressure, panel makers are searching ways to increase profit. Other than improvement production cost through optimizing production capacity utilization rate and focus on high added-value products such as LED, 3D and tablet touch module, etc., panel makers are left with only one way to improve profitability – by increasing panel prices. That’s why the market is strived with the calls for price hikes recently. Impacted by the anticipation for price trend reversal, some downstream businesses with healthy inventory levels may advance their plans to stockpile. However, the situation for the overall terminal market is still far from clear. In light of this, if businesses pull their inventory up to a critical level before the high season in the second half of the year, they might again face the problem of excessive stockpiling some experienced before, which will lead to the plight of a high season with sluggish demand. As a result, the temporary price surges might again be short-lived.
