Marathon of Multiple Pulls and Pushes Terminated Decline in Panel Price and Spurred an 8.2% Increase in Panel Shipments in May
Based on the latest large-size panel shipment report published by WitsView, which is the panel study department under TrendForce, indicates the large-size panel shipment volume for May, 2011 was 60.98 million units, with an increase of 8.2% as compared to April.
WitsView stated that each major panel maker increased the utilization rate in the second quarter and requested a price increase from the clients downstream, as driven urgently by eliminating the financial losses and improving profits. Aided by the Labor Day sales meeting with the expectations in China, which drove the restock for the China TV brands, the decline in the panel prices was terminated and stabilized recently after experiencing almost a year of declining trends. However, the global consumer market demands in the second quarter still remain weak. In comparison with the China brands, the global first-tier brands employed conservative and prudent attitudes toward production and inventory control. In the absence of support from the increasing comprehensive demands, it has dramatically offset the drive for increasing the panel prices. As pulled and pushed at multiple dimensions, it caused the average panel price quotes to maintain at the low level. Some of the clients downstream expressed the willingness of increasing the inventory, thus improving the large-size panel shipment performance in May.
In terms of the application categories, even though the Labor Day sales in China were optimal and stimulated the China brands’ willingness for restock, other major global consumer markets’ demands still remained low in the second quarter, causing a minor 2.1% increase in the TV panel shipment as compared to April. The total shipment volume in May reached 16.72 million units. The MNT panel shipment was 17.38 million units, with a monthly increase of 2.9%. The regular notebook panel shipment was 16.41 million units, with a monthly increase of 11.6%. The shipment performance for the panels used by the standard tablet PCs still maintained a growing trend, with an increase of 27.4% as compared to the previous month and a shipment volume of 6.34 million units. The panels used by the netbooks, as impacted by the second-tier, generic manufacturers’ adoption of mounting it on the quasi tablet PCs, also continuously drove the total May shipment volume to reach 4.11 million units, with an increase of 21.1% as compared to April.
Table 1: TFT-LCD Panel Shipment in May-11 (K units)
In terms of the shipment area, the total shipment area for the month of May reached 9.89 million square meters, with a monthly increase of 5.5%. Speaking of the shipment area for each application category, the tablet PCs’ panel shipment area was 201K square meters, with a monthly increase of 27.5%. The shipment area for the netbook panels with a specification less than 12.1 inches was 134K square meters, with a MoM increase of 20.5%. The shipment area for the TV panels reached 6.31 million square meters, with a monthly increase of 4.2%. The shipment area for the regular notebook panels with a specification above 12.1 inches was 1.064 million square meters, with a MoM increase of 11.3%. The shipment area for the MNT panels was 2.18 million square meters, which achieved a 4.3% higher increase than the previous month.
Table 2: TFT-LCD Panel Area Shipment in May-11 (K square meter)
Based on each individual panel maker, the total shipment volume rankings for May were LG Display, Samsung Electronics, Chimei Innolux, and AUO Optoelectronics, accounting for 28%, 24.4%, 18.6%, and 16.2% of the shipment share, respectively. To be noted, LG Display was the shipment champion for the TV, Notebook, and Tablet application categories, while Chimei Innolux predominantly led the group in the MNT panel shipment. For the LG Display and Chimei Optoelectronic, which competed against each other most fiercely on the China market for the panel market shares, they were also the two makers exhibiting the most significant panel shipment increase ranges, with respective shipment increases of 12% and 11% as compared to the previous month. Samsung Electronics and AUO Optoelectronics also achieved respective increases of 5% and 4% in shipments as compared to the previous month.
Size Wise:
LCD TV Panel: For the specification variations in the LCD TV panels shipped in May, the ratio of the TV panels with specifications less than 26 inches decreased from 21% last month down to 18.2%. The ratio of the 32-inch panels shipped increased from 40.5% last month to 42.4%. The 37-inch panels slightly increased from 3.8% last month to 3.9%. The ratio of the shipments for 40 inches and above increased to 35.5% by 0.7%. To be noted, the 42-inch category exhibited a relatively higher increase, with the ratio increased from 9.95 last month to 11.1%.
Notebook Panel (Including Tablet PCs):For the specification variations in the notebook panels shipped in May, the ratio of the 9.7” panels shipped continued to increase from 18.1% to 19.7%. The overall shipment ratio for the panels used by the tablet PCs also increased from 21.6% to 23.6%, with a 2% increase. Aided by the increased shipment of the quasi tablet products, the shipment ratio for the panels used by the netbooks increased from 14.7% last month to 15.3%. The shipment of the panels larger than 12.1 inches, however, decreased from 63.7% to 61%. To be noted, the 14.0”W’s shipment ratio decreased from 22.3% down to 21.5%; the 15.6”W decreased from 28.7% down to 25.4%, with a 3.3% decrease.
LCD Monitor Panel:For the specification variations in the global LCD monitor panels shipped in May, the overall shipment ratio for specifications under 20”W decreased by 2.4% to 59.8% as compared to the previous month. To be noted, the 20”W shipment ratio increased by 0.4% to 12.4%. For the shipments above 20”W, the shipment ratio increased from 37.8% last month to 40.1%, with a 2.3% increase. To be noted, the 23”W’s increase range was relatively more significant as it increased from 6.1% to 6.9%.
Conclusio:
As the panel market was challenged by the labor and material shortages, Japanese earthquakes, and less-than-expected global economic recovery performance in the first and second quarters, the panel shipment in the first half of the year experienced a relative degree of pressure, which had also improved the circumstances where the supply was greater than the demand. However, the panel makers wished to increase the utilization rate in the second quarter to improve the production costs and increase the panel prices in order to achieve a financial breakeven in this quarter or to reduce the loss. As succeeded closely by the peak demand season in the third quarter, the panel price can move upward. In the long term, however, the supply still remains greater than the demand for the panels. If the peak season demands in the third quarter are not as strong as expected, the gradually increasing cell and module inventories, whether in the hands of the panel makers or downstream brands, may emerge to prevent the panel price in the third quarter from moving upward.
