This thread is intended to help track the current rapidly declining prices of LCD TVs. As per forum rules, no prices from any particular sales outlet will be posted. Rather, news from relevant industry sources on the topics listed below will be collected in a timely manner: ▪ MSRP and ASP (Average Selling Price) news, trends
▪ Market analysis & projections
▪ Product launches*
*Note: There are many blogs covering regular product launches. Since this category has been deemed a thread-cluttering hazard, only launches included within stories whose primary focus is larger market trends, and also products which set exceptionally market-defining pricing, will be included. Other threads in this group on the AVS Forum:
▪ LCD TVs: Fab News Thread
▪ LCD TVs: Technology Advancements Thread
▪ Plasma TVs: Market Price Stats Thread
▪ OLED TVs: Technology Advancements Thread
▪ TDEL TVs: Technology Advancements Thread --------------------------------------
Flat screen war heats up, LCD catching up
2 March 2006
HONG KONG (Reuters) - Consumers are cheering their good fortune, watching prices for big flat-screen TVs tumble while makers slug it out to decide which display standard will become dominant -- liquid crystal (LCD) or plasma.
With the price slide, demand is booming in the key battleground for TVs -- flat screens in the 40-44-inch range -- and analysts say makers of liquid crystal displays (LCD) will probably gain ground in a market that has been dominated by plasma displays (PDP).
"Plasma display makers will do their best to cut costs and fend them off, but LCD makers are investing aggressively to go after the big-inch TVs and should be able to grab a good slice of that market, especially at 40 inches and just above," Hisakazu Torii, director of TV market research at DisplaySearch.
Companies such as Japan's Matsushita Electric Industrial Co. Ltd. (6752.T: Quote, Profile, Research) and South Korea's LG Electronics Inc. (066570.KS: Quote, Profile, Research) have preferred to use plasma screens for 40-inch or larger TV sets since they are easier to mass produce at larger sizes, giving plasma a cost advantage over LCDs.
Plasma TV sets use tiny pockets of gases to display images, while LCDs use crystals sandwiched between glass. LCDs last longer than plasma screens but are not as bright, while plasma has a wider viewing angle but consumes more power.
But prices for big LCD TVs will also come down sharply this year, as massive production ramp-ups are enabling LCD manufacturers to cut their own costs.
In 2005, the 40-inch LCD panel price dropped 36 percent, faster than a 31 percent fall for 42-inch plasma screens. DisplaySearch expects the panel prices to decline at a similar pace this year, with 40-inch LCDs and 42-inch plasmas both falling by about 25 percent.
"LCD panel prices will show a moderate fall in the first half on demand ahead of the World Cup soccer tournament, but the price fall will accelerate in the second half, given ramp-up plans at makers such as LG.Philips LCD Co. Ltd. (034220.KS: Quote, Profile, Research) and Sharp Corp. (6753.T: Quote, Profile, Research) ," said Lee Min-hee, an analyst at CJ Investment & Securities.
One company that sells both standards, Samsung Electronics Co. Ltd.'s (005930.KS: Quote, Profile, Research) , currently prices its high-definition 42-inch plasma TV set around $2,600 while its 40-inch LCD TV set can be bought for less than $2,800.
"Anything 40-inch and above is still quite expensive for the consumers. We are making very active investments to bring the prices down," Chu Woosik, senior vice president for Samsung Electronics' investor relations, said at the Reuters Global Technology, Media and Telecoms Summit in Hong Kong.
DisplaySearch predicts LCD sets will account for 50 percent of the 40-44 inch flat TV market by 2009, compared with 6 percent in 2005, while plasma's share will fall to 49 percent in 2009 from 71 percent.
"We are still selling plasma, a few products, but our focus is purely on LCD," Fujio Nishida, Sony Corp.'s (6758.T: Quote, Profile, Research) European president, said at the Reuters summit in Paris. "The future is LCD. That's our decision."
However, plasma makers say their production cost-advantage and plasma's clearer images will give them a secure place in the fast-growing market. Makers such as Samsung SDI Co. (006400.KS: Quote, Profile, Research) , LG Electronics and Matsushita also plan heavy investments to add capacity, raising concerns among analysts about a potential glut.
"PDP makers have more room to cut prices by improving technology and saving material costs," Chris Kim, Samsung SDI's vice president of PDP sales and marketing, said at the Reuters Hong Kong summit.
OLED
The market itself is rapidly shifting, with manufacturers always looking ahead to bigger screens and better technology.
"Eventually PDP makers will have to move their focus to above 50-inch when LCDs catch up in the 40-inch level," said Michael Min, an analyst at Korea Investment & Securities.
In the race for an edge, panel makers are also investing in organic light emitting diode (OLED) display, viewed as a promising next-generation technology.
Self-luminous and paper-thin OLED screens produce brighter images, respond faster and consume less power. Makers expect OLED displays to replace LCDs on mobile phones starting next year and eventually to compete with LCD and plasma for the monitor and TV panel market.
U.S. researcher DisplaySearch expects the global OLED market to grow to $5.1 billion in 2009 from $518 million last year.
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Overcapacity to delay LCD recovery: Merrill Lynch
23 March 2006
The recovery in the liquid-crystal-display (LCD) industry will arrive several months later than expected as overcapacity further drives down prices, investment research firm Merrill Lynch said yesterday.
The comments came after LG.Philips LCD Co, the world's top LCD panel maker, on Tuesday lowered its forecast for panel prices and shipments in the first quarter. The panel maker, however, raised its outlook for profits on falling costs.
We don't think it's something new ... Prices are falling faster than expected. The strength of growth momentum of all panel companies is weakening, Merrill Lynch technology analyst Daniel Kim told reporters after the conclusion of the second day of the firm's annual technology forum in Taipei.
The market expects panel prices to stabilize this month or next, and the rebound would be pushed back another few months, Kim said.
Kim blamed fast capacity growth for the unexpected fall in prices.
This has nothing to do with demand ... However, the capacity growth rate is faster than the demand growth rate, especially [from] the two South Korean companies," Kim said. "That is resulting in the oversupply.
LG.Philips LCD and Samsung Electronics Co have ramped up their new production lines, which manufacture panels for big-screen slim units such as 40-inch and 42-inch TVs, rather than for more mainstream 32-inch TVs.
Kim expects panel prices for TVs and computers to be weak before the TV shopping season in the second half of the year.
Another Merrill Lynch analyst, Jeffrey Su (蘇志凱), said the firm had retained an "overweight" rating on the LCD component sector, especially Coretronic Corp (中光電), chipmaker Novatek Microelectronics Corp (聯詠) and the Hong Kong-listed LCD TV and computer monitor assembler TPV Technology Ltd (冠捷).
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Samsung, Sony lead LCD-TV price declines, says Insight Media
24 May 2006
Samsung Electronics and Sony appear to be pushing new models into the market at leading price points in May, undoubtedly as a result of increased production at their joint S-LCD fab facility and others may follow next month as they try to match this downward trend, according to research firm Insight Media.
Pricing for LCD-TVs in the 40- to 44-inch size range saw a 5.8% decline in May compared to April pricing, reports the firm. The average retail price for LCD TVs in this ranged dropped US$182 from US$3,142 to US$2,960. PDP (plasma display panel) TVs in the same size range dropped by a smaller 1.5% (US$37) from US$2,547 to US$2,510. PDP TVs maintain and overall pricing advantage over LCD TVs, but the gap is shrinking.
By comparison, pricing for all MDTVs (mobile digital TVs) in the 40- to 44-inch size range were also down US$38 in May from April's data, falling 2.3% from US$1,649 to US$1,611. MDTVs continue to hold a significant price advantage over LCD-TVs and PDP-TVs.
Driving the price decline in 40- to 44-inch size LCD TV were big declines in panels with 1366x768 resolution clustered in the Brick & Mortar Channel group. Monthly pricing data revealed a surge in captured data points, with big increases for Samsung (32 to 99) and Sony (28 to 76) as the main drivers. Looking deeper with the 1366x768 resolution subgroup, Samsung has added five new models and reduced pricing on its previous two models. Sony added two new models and reduced prices on its other four models. These two brands account for 2/3rds of the 1366x768 resolution model price counts and show a price drop of US$283, which is higher than the average for the group.
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In North America, 40-inch LCD TV segment takes lead, but battle will continue
24 May 2006
The battle between the 40-inch and 37-inch LCD TV segments in the North American market has heated up since the fourth quarter of 2005. According to DisplaySearch, shipments of 40-inch LCD TVs in North America have outpaced shipments of 37-inch models since September 2005. However, the 37-inch segment was able to catch up and surpass the 40-inch segment in March 2006, as Sharp and LG Electronics began pushing more products in the segment. In April, the 40-inch segment once again took the crown in the region, the research firm indicated.
Fierce competition is also taking place in Europe. The sales volume of 37-inch LCD TVs totaled 180,000 units in the first quarter of this year, while the 40-inch segment lagged behind and totaled only 130,000 units last quarter, market sources pointed out.
Both segments need to watch out for the rise of the 42-inch segment as well. Prices for 42-inch LCD TVs recently fell even lower than that for 40-inch models due to a big promotion by Westinghouse Electric and Polaroid. The ASP (average selling price) for 42-inch LCD TVs is currently US$2,800 in North America.
The 37-, 40- and 42-inch segments will dominate the LCD TV market through the middle of 2007, according to Taiwan-based LCD TV makers. However, which of those segments will become the mainstream will depend on the competitive-pricing strategy offered by various vendors, the maker anticipated.
In 2006, 32-inch LCD TV shipments will total 14 million units while the 37-inch and 40/42-inch segments will each see about three million shipments, DisplaySearch stated in March.
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The 30 to 39-inch segment to remain mainstream in LCD TV market in 2010, says IDC
24 May 2006
Today's Chinese-language Commercial Times reported that although panel makers are looking to push 40-and larger inch LCD TVs, Bob O'Donnell, IDC's Program VP, Clients and Displays, anticipated that the 30 to 39-inch segment will remain the mainstream size in the LCD TV market for the next few years with the segment expected to account for 50% of the overall LCD TV market in 2010. O'Donnell spoke at a recent IDC Directions 2006 forum, held by IDC in Taipei.
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Global LCD-TV shipments rise 135% in 1Q
25 May 2006
LCD-TV shipments jumped 135% on-year, while falling 14% on-quarter to 7.4 million units in the first quarter of 2006, according to DisplaySearch.
The research firm said the LCD segment had the fastest on-year growth and smallest sequential decline of any TV technology in the first quarter, and its share rose to 17% from 15% in the fourth quarter of 2005.
As a result of gains by larger sizes, LCD TV revenues grew 114% on-year while falling 12% on-quarter to US$8.8 billion.
In terms of screen size, the average diagonal rose 19% on-year and 2% on-quarter to 27 inches, as larger sizes became more affordable, DisplaySearch said.
Average selling prices (ASPs) increased 2% on-quarter, while falling just 9% on-year to US$1,195. The sizes that gained share were the 37-inch segment, the 40-42-inch segment, the 20-21-inch segment and the 45 inches-and-larger segment, while the share of the 22-23-inch, 26-27-inch and 30-32-inch segments stayed flat, and other categories lost share. The 37-inch-and-larger segment rose to 14% from 12% on a unit basis, and to 32% from 29% on a revenue basis.
LCD TVs overtook CRT TVs in the 30-34-inch segment for the first time, on a unit basis, in the first quarter.
All regions enjoyed at least 116% on-year growth for LCD TVs except Japan, where growth was just 35%. Europe and China continued to take share from North America and Japan, with Europe's share rising from 44% to 46% on pre-World Cup demand, DisplaySearch remarked.
Four brands, Sony, Samsung, Philips and Sharp, dominated the LCD-TV market, accounting for a 50% share of units and a 54% share of revenues.
Philips was number one in unit sales but fourth in revenues, while Sony was number four in unit sales and number one in revenues. Sony had the greatest focus on larger sizes of the top nine brands, with 63% of its shipments in the 30-inch-and-larger segment, compared to Samsung with 51%, Sharp with 41% and Philips with 38%.
Philips was number one in unit sales in Europe and North America and led the 15-19-inch market worldwide. Sharp rose from number three to number two in unit sales worldwide, while remaining number one in Japan.
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Where is the LCD TV mainstream heading?
An interview with DisplaySearch president Ross Young
25 May 2006
Ross Young, the founder and president of DisplaySearch, recently spoke with DigiTimes about this year's outlook for the TFT LCD industry, the competition between Taiwan-based and Korean-based panel makers and the fierce battle to set the standard for the next mainstream LCD TV segment.
Q: Can you talk about your forecast for LCD panel supply and demand in 2006?
A: The second quarter is the traditional slow season and both the ASP (average selling price) and gross margins for panel makers will decline significantly. However, for the full year, demand for LCD panels will still be strong and the whole market is expected to rebound in the third quarter. Tight supply for the fourth quarter is expected to be worse compared to the third quarter. Q: What about the competition between Taiwan- and Korea-based panel makers? Which country now leads the LCD industry?
A: Taiwan-based panel makers saw improvement in the first quarter of this year. In terms of shipments, AU Optronics (AUO) accounted for 16.4% of the global LCD panel industry last quarter, with the company beating out LG.Philips LCD for the first time to become the second largest global LCD panel supplier. Samsung Electronics remains the top supplier in the market.
In addition, after officially taking over Quanta Display (QDI) in October, AUO will surpass LG.Philips LCD in terms of shipment area, with 21.4% of the market.
Taiwan also led Korea in terms of panels shipments by 2.4 percentage points in the first quarter. Shipments from Taiwan accounted for 46.2% of the market during the period, up from 44.2% in the fourth quarter of 2005.
However, since Samsung and LG.Philips LCD commenced volume production at their respective seventh-generation (7G) and 7.5-generation (7.5G) plants in January this year, Taiwan-based makers may need to accelerate their schedules to catch up with Korea-based companies in the next-generation TFT LCD production race. For Taiwan-based makers, how to improve yield rates and lower production costs at their 7.5G plants will be key issues to remaining competitive.
Taiwan-based panel makers may be able to take the lead in the 47-inch LCD TV panel market if they speed up their development. Q: Can you also describe the performance of the LCD TV panel market in the first quarter?
A: In terms of applications, LCD TV panels generated revenues of US$5.1 billion in the first quarter, marking the first time that the segment beat out the LCD monitor panel segment, which totaled revenues of US$4.8 billion.
The top five panel suppliers captured more than 90% of the total TV panel market. With the market scale of the the TV panel segment exceeding the monitor panel segment, the gap in profitability between first-tier and the second-tier makers is expected to increase.
Overall, global demand for LCD TVs will reach 42 million units in 2006 with the shipment volume in the first half totaling 16-17 million units. Q: What's the outlook of the 37-inch LCD TV panel segment this year? Will it beat out the 40- and 42-inch segments to become the market mainstream?
A: In the first quarter, the 37-inch LCD TV panel segment accounted for 8% of TV panel sales, compared with only 6.9% for the 40-42-inch segments. However, this quarter, the 40-42-inch segments will account for 9.8% of the market, while the share for the 37-inch segment will be 9.2%. This gap will increase by almost three percentage points in the third quarter.
Downstream, the 37-inch LCD TV segment is seeing pressure from the 40-inch LCD TV and 42-inch PDP TV segments. In the recent top 20 LCD TV list for North America, seven models are from the 40-inch segment while eight models are in the 32-inch segment. The 37-inch LCD TV took only one position.
The 40-inch LCD TV segment is strongly supported by Samsung Electronics and Sony, with the two companies ranked second and the fourth, respectively, in the global LCD TV market during the first quarter.
The ASP for 42-inch PDP (plasma display panel) TVs is approaching the ASP for 37-inch LCD TVs, which may also hinder its market share.
However, the 37-inch LCD TV segment will not be phased out. Q: If demand for 37-inch LCD TV panels is not as strong as expected, how should panel makers adjust their product mix at their sixth-generation (6G) plants?
A: Panel makers can still use their 6G plants for monitor and notebook panel production.
Demand for LCD monitors will increase about 5% per year over the next few years. With rising demand and a limited number of fifth-generation (5G) plants, panel makers could use their 6G plants to produce monitor panels. Q: How about the competition between 42- and 40-inch LCD TV panels? Will the ASP for 42-inch panels drop below that of 40-inch panels?
A: Most panel makers will focus on 42-inch panel production, which means more component makers will target this segment as well. With the increased production scale, prices in the segment stands a good chance of falling below prices in the 40-inch segment. ----------------------------------------------------------------------------------------------------
Fifty-inch LCD TV to become mainstream
26 May 2006
The 50-inch LCD TV segment will become mainstream in the TV market in the near future, with pricing to become competitive against same-sized PDP (plasma display panel) TVs, according to Hsiung Hui, executive vice president of AU Optronics (AUO) and David Choi, vice president of LG Philips LCD (LPL), as quoted by the Chinese-language Economic Daily News (EDN).
Panel makers are migrating to next-generation LCD production and production costs will decrease further, noted the paper. As a result, the 50-inch segment will become more competitive, the paper quoted Hsiung as saying. The price decrease for 50-inch LCD TVs will be faster than that for the same-sized PDP TVs, the paper quoted Choi as saying.
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iSuppli: Large-size panel prices nosedive, but stabilization to come in 2H
31 May 2006
Swelling inventories and disappointing demand from all applications are causing prices for large-sized panels to plunge in the first half of the year, with no relief expected until the second half, according to iSuppli.
Prices are falling for large-size panels used in notebooks, monitors and TVs. In some applications, including monitors, prices are falling to parity or below manufacturing cost levels for certain suppliers.
The oversupply situation worsened in April in the TV panel segment because inventories started building up in Europe in the first quarter due to slower-than-expected TV sales associated with the Winter Olympics.
This is placing an additional burden on the large-size panel market, which already was struggling with slower-than-expected notebook and monitor sales in the first quarter.
At the same time, most panel suppliers are continuing to expand their capacity, and are not cutting utilization rates or reducing production. Typically, large-size panel suppliers reduce their manufacturing utilization rates and slow their panel output during periods of oversupply. However, this year, most of them are maintaining their high production levels. This is because cutting production would actually increase their costs and impact their already-slim profit margins due to their huge investments in new production facilities.
TV panel prices slide
TV panel price reductions accelerated in April. Pricing for 32-inch and 40/42-inch TV panels declined by 7.3% and 7.2% from March to April, falling to an average of US$481 and US$879, comparing to a more moderate decline of 3.5% for the 32-inch panels and a 2.7% reduction for the 40/42-panels from February to March.
These declines came despite news from some suppliers that demand was reasonably strong for 40-inch-and-larger panels. However, demand was weaker than expected while rising production from newer-generation fabs contributed to the pricing freefall.
TV panel prices are expected to continue to decline through the third quarter.
The sinking of the monitor
Inventory build-ups and weak demand resulted in drastic price cuts for monitor panels in April. This brought prices closer to manufacturing cost levels for some suppliers - and even below cost levels for others.
Pricing for 17-inch monitor panels fell 12% from March to April while 15- and 19-inch monitor panel prices declined 9-10% during that period. In contrast, 17-inch monitor panel prices declined 4.1% from February to March, and 2.7% for 19-inch monitor panel prices during the same period.
Some panel suppliers are shifting capacity to panels for widescreen 19-inch and larger-size monitors. System vendors are clearing up the accumulated inventories in the distribution channel.
Price reductions have had the effect of improving end-user sales in some regions. Because of this, the rate of price reductions will slow in the coming months. By the end of the second quarter, the inventories are expected to clear up and an increase in demand likely will be seen due to back-to-school demand and the ramp-up in sales of Restriction of Hazardous Substances (RoHS) compatible products in Europe. This will shift the market back to a tight supply situation in August, resulting in panel price increases.
What good are notebooks?
Seasonally slow first-half notebook sales and the general reduction of inventories in the first and second quarters resulted in an oversupply situation for notebook panels in April.
From March to April, notebook panel prices for the 14- and 15-inch sizes fell 9.9% and 10.3%, respectively. This compares to reductions from February to March of 5.5% for 14-inch panels, 5.3% for the 15-inch size and 3.2% for 15.4-inch products.
By the end of the second quarter, most of the mainstream notebook panel prices are expected to decline to the US$95-110 range. The notebook market is expected to shift back to a tight situation by September, resulting in panel price increases due to back-to-school demand and holiday sales in the fourth quarter.
Capacity expansions on the way
Panel production capacity is continuing to increase in the second quarter. Most of the panel suppliers shifted production from the 17-inch size to 19-inch and larger widescreen panels or to large-size TV panels, rather than reducing the utilization rate in order to not increase cost. Capacity is increasing at a rate of at least 10-15% at sixth-generation (6G) and newer fabs.
Stronger second half expected
iSuppli projects oversupply of large-size LCD panels will persist throughout the first half. This will lead to price reductions during the first six months of the year for most panel sizes and applications.
The large-size panel market is expected to shift back to a tight supply situation in the second half and especially in the fourth quarter of 2006. Monitor panel prices will start increasing initially, followed by notebook panel prices in the third quarter of 2006. Meanwhile, the TV market is also expected to go into a state of tight supply in the fourth quarter, resulting in stable panel prices by the end of 2006.
Sweta Dash is the director of LCD and projection research at iSuppli. More information on the current market situation can be found in Dash's monthly LCD Health Watch report. For more information on this report, please visit: http://www.isuppli.com/catalog/detail.asp?id=7960
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DisplaySearch: Large-size LCD-panel revenues rise 58% on-year in 1Q
1 June 2006
Worldwide shipments of large-size (10 inches and larger) TFT-LCD panels rose 44% year-on-year, with revenues growing 58% to US$12.9 billion, according to DisplaySearch.
Revenue growth exceeded unit growth as a result of increased output of larger sizes, with area growth up 71% on-year, the average diagonal up 1.2 inches or 7% to 18.3 inches, and average selling prices (ASPs) growing 9%, the research firm reported.
According to DisplaySearch, with only TV-panel shipments rising sequentially and the average TV-panel diagonal rising to 28 inches, TV-panel revenues exceeded monitor-panel revenues for the first time, in the first quarter of 2006, at US$5.1 billion and US$4.8 billion respectively.
Unit shipments fell 5% sequentially, on seasonal weakness. With most panel suppliers expecting stronger results, panel inventories increased, resulting in rising pressure on prices. As a result, revenues fell 8% sequentially.
With panel prices weakening and inventory building, panel suppliers' margins fell from 12% in the fourth quarter of 2005 to 5% in the first quarter of 2006, but were up from -12% in the first quarter of 2005.
With panel prices continuing to fall rapidly in the second quarter of 2006, margins are expected to erode further. Monitor and notebook-PC panel prices are expected to stabilize in the third quarter of 2006 before increasing in the fourth quarter of 2006, leading to improved financial results.
Notebook-panel shipments fell 6% on quarter to 18.6 million units. Due to significant price erosion, notebook-panel revenues were down 16% on quarter, while rising 36% on year to US$2.5 billion. While the overall notebook-panel market was down, widescreen notebook panels continued to grow, rising 13% on quarter to capture a 62% share of all notebook panels shipped in the first quarter of 2006.
The dominant notebook-panel segment was 15.4 inches at 1280×800, earning a 36% share, up from 30% in the fourth quarter. The 14- and14.1-inch 1280×800 segment surpassed the 14.1-inch XGA segment to become the third most popular category of panel and is expected to overtake the 15-inch XGA segment in the second quarter to become the second most popular panel for notebooks. Samsung remained first in notebook panels, followed by LG.Philips LCD, Quanta Display, AU Optronics (AUO), and Chi Mei Optoelectronics (CMO).
LCD-monitor-panel shipments fell 9% sequentially in the first quarter, which resulted in double-digit price declines and an 18% sequential decline in revenues. However, there were some bright spots. The 19-inch-and-larger segment's share surged from 28% to 35% on 14% on-quarter growth, and the widescreen-monitor-panel segment's share rose from 7% to 10% on 14% on-quarter growth.
The 19-inch widescreen segment became the fourth most popular panel, while the commodity 17-inch SXGA panel's share is expected to fall below 50% in the second quarter. On an individual company basis, Samsung continued to lead in terms of units, revenues and total panel area shipped. AUO overtook LG.Philips for the first time to capture the number-two position with a 16.4% share. By country, Taiwan led on an areal basis, with a 55% share.
LCD-TV panel shipments were the only segment to enjoy sequential growth, rising 11%. Revenues grew nearly as fast as units, up 10%, with LCD-TV panel area shipped rising 15% sequentially on increased demand for larger sizes.
The 30-inch-and-larger segment's share rose to 48% in the first quarter, from 45% in the previous quarter. The 40-inch-and-larger share reached 8% on the success of Sony and Samsung LCD TVs, and panel suppliers expect this category to more than double to 17% in the third quarter of 2006. The top-five panel suppliers continued to dominate this segment, earning a 90% share.
In terms of total first-quarter output, on an areal basis, by supplier, Samsung retained the top position with a 22% share, leading in each major application. LG.Philips remained number two, but its share fell below 20% on a 6% areal decline. On an areal basis, it was number two in both notebook and TV panels, and number three in monitor applications.
AUO achieved 5% sequential growth to boost its area share to 15.4%. It was number two in monitors, number three in TVs and number four in notebooks. Chunghwa Picture Tubes (CPT) had the fastest area output growth of any supplier, up 16% sequentially.
By region, Taiwan suppliers overtook Korean suppliers for the first time, on an area basis, at 46% and 44% respectively.
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Quotes for 37-inch panel prices may drop to US$600 by 3Q
1 June 2006
Due to competition from the 40-inch segment and a continued capacity ramp up, quotes for 37-inch panels may drop to US$600 by the end of the second quarter or at the beginning of the third quarter, according to market sources.
Panel makers such as LG.Philips LCD and AU Optronics (AUO) are ramping up capacity at their sixth-generation (6G) plants. Prices for the 37-inch segment have fallen from below US$800 this February to below US$700 in April amid the capacity ramp up and competition among the makers, the sources indicated.
The quotes will drop US$20-30 in June, with the ASP (average selling price) likely to fall to US$620-630, the sources added.
However, panel makers may no longer suffer from rapid price reduction in the third quarter, because end-user prices have not dropped at the same speed during the first half of this year and LCD TV demand will become stronger in the second half due to seasonal effects, industry sources indicated.
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iSuppli: Innovation vs. business at SID 2006
5 June 2006
The annual conference of the Society for Information Display (SID) traditionally has been a venue for presenting technological developments, and this year's event will be no exception, with plenty of innovations expected to be shown. With an estimated 500 technical papers, 250 exhibiting companies and as many as 8,000 attendees expected at SID 2006, it's clear that there continue to be no lack of technological developments in the display industry.
Technology development vs. manufacturing
There's often a lag between technological developments of the sort that are disclosed at conferences like SID, and the start of volume manufacturing. As technologies move from the laboratory-curiosity stage to the prototype/sample manufacturing stage, activity increases as the prospects for commercialization draw new participants into the field; on the other side, as technologies move from development into mass production, there is often a falloff in technical breakthroughs-at least those shown publicly-as the focus shifts to increasing manufacturing efficiency and reducing costs.
Looking at the approximately 280 papers accepted for presentation at SID 2006, this pattern is evident. The chart below plots the number of papers on each major display technology, as assessed by the title, and compares this distribution to a plot of the stage of manufacturing, from pre-commercial to high-volume production. One can see that the peak of the paper distribution concerns OLED (organic light-emitting diode) displays, which are in low-volume production. In contrast, the more mature technologies have fewer papers associated with them.
Less mature technologies continue to gain momentum, as evidenced by innovations such as LED/laser projection. Because the development of active matrix/polymer OLED technologies is significantly behind that of passive-matrix (PM)/small molecule OLED, dividing the OLED papers further along these lines likely would illustrate this phenomenon in more detail.
Taking care of business
Although SID is a technical organization, as the flat-panel market has grown, there has been increasing focus on the business aspects of the industry. The business conference, added just a few years ago, has become one of the most popular elements of the SID conference; last year, an investors conference was added, expanding the business conference to three days.
The shift in emphasis from technology to business is a reflection of the maturation of the display industry, which is approaching US$100 billion in size. It is also reflects the growing commoditization of key segments of the market. Technology still matters greatly in the industry, but in large parts of the market, the amorphous silicon (a-Si) TFT LCD dominates, and business and technology trends are driven more by manufacturing investments than by developing fundamentally new ways of making a display.
In these areas, materials cost reduction and process simplification have become the most important types of innovations.
Large-size TFT LCD rules the roost...
Increasingly, the display market is being driven by TV and by TFT LCD technology.
In the near term, the industry has been too optimistic in its expectations for the LCD TV market. However, in the long term, iSuppli believes that there will be tremendous growth in LCD TV shipments, from 38 million units in 2006 to 128 million units in 2010. Revenue for large-size LCDs are growing rapidly, reaching US$44 billion in 2006, up from US$25 billion in 2005.
iSuppli expects large-sized TFT LCD revenues to surpass US$85 billion in 2010. However, the key will be for panel makers to maintain a reasonable level of profitability, which is always a difficult long-term proposition.
...but competition via investment can be painful
The large-size TFT LCD market has been experiencing rising levels of oversupply due to significant increases in production capacity. While conditions have been deteriorating for panel makers, declining prices and growing supply of larger screen sizes for LCD TV should spur a significant increase in demand in the second half of the year.
In the second quarter of 2006, the TV market, previously the area of strongest demand, has begun to appear saturated. In April, there was evidence of growing inventories, driven by over-production in hopes of a strong sales of LCD TVs for the Winter Olympics and the upcoming World Cup tournament.
With prices falling and supply improving, demand is increasing for the largest-size LCD TV panels, i.e. 40/42-inch and greater, and the 32-inch panel has started to become a commodity, with substantial oversupply and prices likely to reach US$400 by year's end.
In the monitor market, sales of 19-inch and larger panels have increased, as has the demand for widescreen panels. However, the oversupply in the mainstream panel market has worsened, and the 17-inch price has fallen below US$120. While panel makers would like to shift the market to the 19-inch size, there is still a US$40 price premium at the panel level.
Meanwhile, the outlook for the notebook market had been positive, but the delay in Microsoft's Vista operating system is causing some to lower their expectations for unit growth in 2006. Oversupply conditions in the notebook market are leading to some cuts in production.
The oversupply condition has resulted in price drops that have led second-tier panel makers to sell at levels below costs for some sizes. However, panel makers remain optimistic about long-term market growth, particularly in LCD TV. There is no slowdown in announcements of new capacity, particularly in seventh- and eighth-generation (7G and 8G) fabs.
For example, Samsung Electronics and Sony announced their plan to establish an 8G fab at their venture called S-LCD, and are boosting capacity at their seventh-generation fab. Chi Mei Optoelectronics (CMO) has announced a plan to invest in an 8G fab. Meanwhile, AU Optronics (AUO) announced its plan to merge with Quanta Display, which is expected to be completed by October.
PDP: Still glowing
Shipments of PDP (plasma display panel) continue to grow rapidly, with the market expected to reach nearly 10 million units in 2006, up 50% from 2005, during which the market grew 84%. iSuppli expects the plasma panel market to exceed 21 million units in 2010, driven by TV sales.
PDP makers Matsushita Electric Industrial, Samsung and LG Electronics (LGE) have been increasing capacity, but are challenged by rapid increases in sales of 40- /42-inch LCD panels, and soon 50-inch and larger panels. The resulting price competition will limit revenue growth for PDP makers severely after 2007, so manufacturing cost reductions will be critical.
OLED: From the frying pan into...?
OLED makers have made significant strides in increasing production, with shipments passing 50 million units in 2005 and expected to exceed 250 million by 2010. Nearly all of the OLEDs produced have been PM devices using small-molecule technology, although there is vigorous development of active-matrix (AM) versions, with polymer devices in the future, with the hopes of lower manufacturing costs. Given the vigorous price competition in the small-to-medium-size display market, OLED manufacturers will have to reduce prices to compete, thus limiting revenue growth somewhat, even as they roll out AMN devices.
Given its dependence on handset displays -in 2005, 60% of OLED revenues and 67% of displays were generated by the handset market-OLED is coming of age in a very challenging market.
Mobile phones have been a key market for LCDs, but as handset market growth has slowed, TFT LCD makers have sought to displace STN LCDs in both primary and secondary displays, and price competition has been severe. In 2005, handset display unit shipments grew by 19% to pass 1 billion, while revenues grew by less than 16% to US$12.7 billion. This occurred even as screen sizes, pixel counts and numbers of colors all grew.
While there are profitable niches in the small-to-medium-size display market, iSuppli expects LCD revenues in this category to peak at slightly more than US$23 billion in 2007.
Keeping on top of displays
SID certainly has maintained its position as the premier industry conference and tradeshow outside of Asia. While the production of displays is firmly centered in Asia, there are large end markets and numerous sources of technology innovations-from startups, corporate research groups and academic labs-which maintain a critical mass of activity for the display industry. If this year's SID is any indication, there is no sign of this trend slowing down.
Paul Semenza is vice president, display and consumer research at iSuppli.For more information on the display business, attend iSuppli's Flat Information Displays (FID) 2006 event in November. For more information, please visit: http://www.isuppli.com/fid2006/
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iSuppli: LCD-TVs to surpass CRTs by 2009
6 June 2006
In light of dramatic reductions in pricing and increased consumer acceptance, research firm iSuppli has raised its forecast for LCD-TV panel production in 2006, and now is predicting that LCD-TVs in three years will displace CRTs as the leading type of television manufactured worldwide.
iSuppli has boosted its 2006 forecast of shipments of LCD panels used in televisions to 46.7 million units, up from its previous prediction of 41.9 million units. LCD-TV panel shipments now are forecasted to rise by 74 percent compared to 2005, said the research firm.
"Increased production capacity from sixth- , seventh- and eighth-generation LCD fabs has led to rising availability and decreasing costs for the types of large-sized panels used in televisions," said Sweta Dash, director of LCD and projection research for iSuppli.
LCD-TV panel shipments in the first quarter increased by 7 percent compared to the fourth quarter of 2005, reaching 10.6 million units, Dash noted. As a result of this, and due to demand that fell short of suppliers' expectations in the first quarter, the average price for larger LCD-TV panel sizes, i.e. 32-inch and 40/42-inch, fell by 17 percent and 14 percent respectively in May compared to January 2006.
"Although LCD-TV panel demand increased in the first and second quarters due to sales related to the World Cup, shipments fell short of the expectations of some suppliers," Dash said. "Despite that, the second quarter is expected to bring continued growth for LCD-TV panel makers due to reduced prices and increased adoption among consumers. Shipments will accelerate further in the second half due to these factors."
LCD-TVs to surpass CRTs by 2009
Increases in capacity and falling prices for panels are impacting the LCD-TV market itself, causing consumers increasingly to choose LCD-TVs rather than sets based on CRT and other display technologies. LCDs accounted for 17 percent of television shipments in the first quarter, up from 15 percent in the fourth quarter, according to iSuppli.
With its rate of adoption accelerating, LCD will become the leading display technology for television by 2009, accounting for 48 percent of factory shipments. The CRT's share of the market will decline to 42 percent that year, marking the first time ever that CRT is not the leading technology for television display.
By 2010, LCD will account for the majority of television shipments for the first time, with 56 percent of unit shipments, iSuppli predicts.
LCD-TV panel market share shifts in favor of Taiwan
In terms of market share in the LCD-TV panel business, LG.Philips LCD (LPL) maintained its leadership in the first quarter, with 22.3 percent of unit shipments, according to iSuppli. The company's shipments increased to 2.4 million units in the first quarter, up 6 percent from 2.2 million in the fourth quarter.
Samsung, Chi Mei Optoelectronics (CMO) and AU Optronics (AUO) in the first quarter retained their second- , third- and fourth-place rankings with market shares of 20 percent, 18.7 percent and 16.8 percent, respectively. Both Samsung and CMO saw their market share decline slightly.
However, AUO managed to boost its market share on a strong surge in unit shipments.
The varying performances of Samsung and AUO can be attributed to the portion of the market they are choosing to serve. AUO is focused on increasing production of the popular 32-inch and 37-inch sizes, which are most efficiently made at the type of sixth-generation fab it operates. Samsung, on the other hand, has focused more of its capacity on higher-priced, lower-volume 40-inch and larger-sized TV panels, as it ramps up in its two seventh-generation fabs, one of which commenced production at the beginning of the year.
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LCD panel makers feel bite of ASP erosion in May
9 June 2006
With large-size panel ASPs (average selling price) continuing to fall, consolidated sales from most major Taiwan-based panel makers fell 7-20% sequentially in May, according to the companies.
Quanta Display (QDI) was the only major Taiwan maker to report growth in both sales and shipments of large-size panels during the period, while AU Optronics (AUO), Chi Mei Optoelectronics (CMO), Chunghwa Picture Tubes (CPT) and HannStar Display all had falling revenues.
QDI's consolidated sales increased 2.8% sequentially to NT$5.7 billion (about US$175 million) while its large-size panel shipments rose 6% to 1.25 million units, as the company cleared out of its inventory and demand for its products picked up slightly. However, sources expect QDI to continue seeing losses in the second quarter due to a slow industry performance. QDI reported losses of NT$667 million (about US$20.5 million) in the first quarter of this year.
HannStar's sales and shipments declined the most. The panel maker's sales fell 19.6% while shipments declined 17.2% sequentially. The company also reported net losses of NT$125 million (about US$3.9 million) in the first quarter of 2006.
Although both CMO and CPT saw rising large-size panel shipments in May, both makers' consolidated sales (including CPT's TFT business) still declined sequentially due to falling ASPs.
AUO recently made a downward adjustment on its its shipment goal for the second quarter, as its May consolidated sales declined 10.3% sequentially to NT$20.1 billion (US$618 million), amid a faster-than-expected ASP decrease, said company executive vice president Hsiung Hui.
Swelling inventories and disappointing demand from all applications caused prices for large-size panels to plunge in the first half of 2006, with no relief expected until the second half, according to iSuppli.
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LG.Philips LCD lowers shipment forecast, predicts sharper price decrease
12 June 2006
LG.Philips LCD expects its large-size panel area shipments to increase by a mid-teen percentage sequentially in the second quarter of 2006, a decline from the previous guidance of a mid-to-high twenties percentage increase.
LCD TV shipment growth at the end of the second quarter is expected to be approximately 25% sequentially, approximately 50% less than previously announced expectations, the company said.
The large-size panel ASP (average selling price) at the end of the second quarter is to decline by a mid-teen percentage quarter-end on quarter-end, compared to a mid-to-high single digit decrease guided previously.
The company's EBITDA margin is now expected to be around 10%, a decrease from the previous guidance of approximately 20%.
Several factors affected the global LCD industry during the second quarter. First, the industry experienced sharper-than-expected price declines across all product categories. In addition, while mid-to-long term demand for panels remains strong, LG.Philips LCD saw weaker seasonal demand during the second quarter, which has increased its inventory to about four weeks, a higher level than anticipated, commented Ron Wirahadiraksa, president and CFP of LG.Philips LCD.
Given these factors, the panel maker has decided to temporize production to address inventory concerns and better balance its short-term supply with demand. Furthermore, the maker is reviewing its total capacity plans for the year and beyond.
LG.Philips LCD expects to report final second quarter results on Tuesday, July 11, and will conduct a conference call at that time to discuss the results.
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LCDs tighten market grip
13 June 2006
San Francisco -- Like it or not, LCDs look to be the dominant display technology for the foreseeable future.
The 2006 Society for Information Display Symposium here last week was short on drama over platforms--no endless discussions over whether plasma can win the battle for supremacy in flat-panel TVs, scant debate about if and when organic LEDs (see story, page 14) will mount a serious challenge to LCD panels. Instead, the liquid-crystal display ruled the day, anointed by analysts and snaring much of the product and technology development attention.
LCDs continue to benefit from huge capital investments, and technical advances in backlights and display processes are eradicating some of the technology's performance drawbacks. "We simply don't see anything on the horizon that will challenge the LCD," said Paul Semenza, vice president of displays for market watcher iSuppli Corp. "The gestation period for new display technologies is measured in decades, not years, so the LCD's dominance will continue for some time."
LCDs are making strides in flat-panel TVs, said Joe Virginia, vice president of Samsung Inc.'s LCD Business in the Americas. He cited DisplaySearch Inc. predictions of a 28 percent CAGR for LCD TV sales, from 41.7 million to 111.4 million units, between 2006 and 2010.
Both DisplaySearch and iSuppli expect LCDs to overtake the longtime dominant TV display technology, cathode ray tubes, by 2009. DisplaySearch's projections call for LCD TV shipments to reach 96.9 million that year, compared with 90.4 million for CRT-based sets.
The key LCD suppliers--Sharp Corp., Samsung, LG.Philips LCD Co. Inc. and Taiwan's AU Optronics Corp.--have invested huge sums in state-of-the-art fabs that allow more-efficient production of large panels. The capacity influx has lowered panel prices and thus made LCD TV pricing more palatable. According to iSuppli, ASPs for 30- to 34-inch LCD TVs will fall below $1,200 by the fourth quarter, though analysts like IDC Corp.'s Bob O'Donnell contend prices must sink below $1,000 to attract the average consumer.
Nevertheless, the rapidly falling prices and rising availability for LCD panels over 40 inches are putting the squeeze on plasma, traditionally the preferred flat-panel technology for larger displays.
Plasma display makers are not standing still. Suppliers are making strides to improve plasma's brightness, power consumption, contrast and gray-scale characteristics, Takeshi Uenoyama, director of the Advanced Technology Research Lab and Image Devices Development Center at Matsushita, said during the SID keynote session.
According to DisplaySearch, plasma panels will soon be available with luminous efficiencies of up to 2.5 lumens per watt, up from 1.8 lumens/W a year ago. Glass thicknesses are dropping from 2.8 mm to 1.8 mm, and contrast ratios are improving from 3,000:1 to as much as 5,000:1.
Plasma display shipments will rise from 10 million in 2006 to more than 21 million by 2010, according to iSuppli. Revenue, however, will only grow from $7.7 billion to $9.8 billion over the same period, as falling plasma display prices squeeze profits, iSuppli predicts.
Peter Kwon, president and CEO of South Korea-based research firm Displaybank, expects retail prices for 42-inch plasma TVs to average $870 by 2010, only $95 more than the $775 average tag expected for 42-inch LCD sets.
Tech Progress
Meanwhile, LCD technology continues to advance. One limitation of LCDs has been the bulky backlight, based on cold-cathode fluorescent lamps. Attempts to use LEDs in place of CCFLs have fallen short, largely because of LEDs' high cost. At SID, Global Lighting Technologies Inc. demonstrated an LED-based backlight for a 40-inch-plus LCD panel whose edge-lighting scheme reduces the required number of LEDs to 22, according to David DeAgazio, director of global sales.
LCD contrast ratios are expected to improve from 5,000:1 to 7,500:1 by 2007, said David Choi, vice president of product strategy development for LG.Philips LCD. Philips Electronics is incorporating its Aptura lighting technology in 32- and 42-inch LCD panels to reduce motion blur and improve color rendition.
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Panel makers brace for price cuts, as LG.Philips cuts shipment goals
13 June 2006
With LG.Philips LCD cutting its shipment goals for the second quarter, panel makers expect sharp drops in prices for 37-inch TV panels, according to industry sources.
The sources pointed out that with LPL cutting its prices, the industry is seeing pricing in the 32-inch and 37-inch segments approach the US$400 and US$600 levels, respectively.
However, LG.Philips' pricing strategy has failed to solve its inventory issues, making it necessary for the Korean maker to lower its second-quarter shipment forecast, the sources said.
Prices for 32-inch panels are already close to production costs, and further significant price decreases are not expected. For the 37-inch segment, the sources predict that sharp price drops will soon begin, further eroding panel makers' profits. But prices for the 37-segment should stabilize in the third quarter, the sources added.
As LG.Philips has lowered its forecast for its EBITDA margin to about 10% for the second quarter, the company will certainly be in the red for the quarter, the sources indicated.
Its major competitors in Taiwan, AU Optronics (AUO) and Chi Mei Optoelectronics (CMO), may see profits of around NT$2-3 billion (US$61.2-91.7 million) and NT$1-2 billion respectively for the second quarter, the sources added.
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Falling LCD TV prices to spur demand in second half of year, say panel makers
14 June 2006
Although panels makers are cutting their forecast goals for the second quarter, TV makers still maintain a positive outlook for the second half of the year amid strong demand driven by attractive prices, according to sources at panel makers.
Although panel prices dropped dramatically in the first half of this year, system prices do yet completely reflect the changes, some panel makers stated. Therefore, once pricing for LCD TVs drop further in the second half, demand will pick up and inventory levels will drop, the sources pointed out.
LCD vendors, especially first-tier vendors, will continue adopting aggressive pricing strategies throughout this year to stay competitive, Taiwan-based flat panel TV makers pointed out.
Some first-tier LCD TV vendors have lowered their prices. Sony recently cut the price on one of its 40-inch LCD TVs (KDL-40S2000) by US$500 to US$2,499 while the price on a 32-inch LCD model (KDL-32S2000) was reduced US$200 to US$1,699, according to information from the company website.
LCD panel makers including LG.Philips LCD (LPL) and AU Optronics(AUO) recently cut their shipments goals for the second quarter due to weak demand.
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Samsung: US LCD sales to rise 75% in '06
14 June 2006
Samsung is expecting the US LCD market to explode this year - by 50 to 75%. We already know that LCDs are set to out sell CRTs in a few years so this might not be to far off base. They credit this to high-def gaming and HD DVD/Blu-ray. We think it is more along the lines of dropping prices and the increase in quality. Who doesn't want one of the nice, thin screens? A good amount of the videophiles that do the high-def gaming and movie watching already have a HDTV, but it is the Mom and Pop of America that is making the upgrade.
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CMO to ship 100,000 22-inch widescreen monitor panels per month by end of 3Q
14 June 2006
CMO widescreen monitor panels at FPD Taiwan 2006
CMO executive introduces company products at FPD Taiwan 2006
Chi Mei Optoelectronics (CMO) aims to see monthly shipments of its 22-inch widescreen panels reach the 100,000-unit level before the end of the third quarter, according to Kuo Chen-Lung, assistant vice president of the LCD-TV division at CMO.
With prices of 22-inch widescreen monitors soon expected to be lower than prices of 19-inch monitors on year ago, CMO is optimistic that the speed of widescreen replacement in the monitor segment will quicken, Kuo said.
Pricing is a key factor for the adoption of widescreen monitors, Kuo said. CMO shipped over 500,000 19-inch widescreen monitor panels in May, as prices in the segment dropped to around the same level as prices of 17-inch panels one year ago, Kuo indicated.
Using fifth-generation (5G) or 5.5G plants to produce 22-inch widescreen panels is very cost efficient, as a 5G glass substrate can be cut into eight 22-inch widescreen panels, with the number of cuts from a 5.5G substrate for the segment being 12, Kuo said.
CMO is now using its 5.5G plant to produce 1,680×1,050-resolution 22-inch widescreen panels, Kuo noted.
The panel maker is showing widescreen monitor panels at FPD Taiwan 2006 (Jun 14-16), with sizes from 19, 22, 24 to 30 inches and Kuo was speaking at the show.
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FPD Taiwan 2006: Corning sees 2006 as breakthrough year for LCD TVs
14 June 2006
Corning showcases its 8G glass substrate at FPD Taiwan 2006
US-based Corning, the world's largest supplier of glass substrates for TFT-LCD panels, said at the FPD Taiwan 2006 show that it sees 2006 as a breakthrough year for LCD TVs. Co-hosted by SEMI (Semiconductor Equipment and Materials Institute) and PIDA (Photonics Industry and Technology Development Association), the FPD Taiwan 2006 show started on Wednesday at the Taipei World Trade Center (TWTC) and the Taipei International Convention Center (TICC) as a part of three-days event series that also include OPTO Taiwan 2006, LED Lighting Taiwan 2006, Optics Taiwan 2006 and OptoCom Taiwan 2006.
Since the 3x price threshold was broken two years ago, LCD TVs are now expected to make a market breakthrough similar to color TVs in the 1960s and LCD monitors in the early 2000s, according to Corning. In 2006, the global LCD glass market will grow between 40% and 50% in terms of square millimeters shipped in total, and large-size substrates (above 5G) are expected to be the locomotive of that growth, with shipments increasing by over 150%, the company said.
Nitin Kulkarni, who was recently reappointed as president of Corning Display Technologies Taiwan, said that Japan remains the world's number one region in terms of LCD TV penetration, and the penetration rate is projected to increase from 48% in 2005 to 62% this year and 73% next year. However, Western Europe is still the biggest LCD TV market (followed by North America and Japan), but its contribution to worldwide LCD shipments will decline from 40% last year to respective 39% and 37% in 2006 and 2007, he said. China will soon become a huge LCD TV market, he added. Corning predicts that North America will account for 25% of global LCD TV unit shipments in 2006 and Japan will take 15% of the market, so the rest of the world is expected to have the remaining 21%. In 2007, the rest of the world is expected to contribute 28%, ahead of North America (23%) and Japan (12%), and the growth will be mainly driven by China, according to Corning.
Last year, global TV sales were about 190 million units, and LCD TVs contributed 11%, Kulkarni said. From 2005 to 2007, Corning sees LCD TV glass substrate demand increasing at a compound annual growth rate (CAGR) of 77% in terms of square millimeters shipped. As a result, the LCD penetration in the TV market will grow from 11% currently to 29% next year. Corning predicts that global TV sales will reach 205 million units in 2007, Kulkarni pointed out.
He also confirmed that Corning intends to begin commercial shipments of eighth-generation (8G) glass substrates (2160×2460 mm) from the Kakegawa (Shizuoka Prefecture, Japan) plant in the third quarter of 2006. So far, Japan-based Sharp is the only customer that signed a supply agreement with Corning to order 8G glass substrates. Last month, Corning announced that it will become the main glass substrate supplier for Sharp's 8G fab in Kameyama (Mie Prefecture, Japan), which is expected to open later this year.
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Large-size panel industry to bottom out in August: Q&A with Sweta Dash, director of LCD and projection research at iSuppli
16 June 2006
Large-size panel prices have fallen at a faster than expected rate while panel makers have trimmed their shipment forecasts in the second quarter. DigiTimes.com recently had the opportunity to meet with Sweta Dash, director of LCD and projection research at research firm iSuppli.
Dash shared with DigiTimes.com iSuppli's an updated forecast on the supply/demand of the industry, the domination of the 40/42-inch TV panel segment, the widescreen panel trend and a comparison of the competitiveness of panel makers in various regions.
Q: Monitor panel prices have fallen to approach the cost level of second-tier players while both AU Optronics (AUO) and LG.Philips LCD have trimmed their shipment forecasts. When do you expect panel price fall to ease? How about TV panel prices, in particular?
A: Prices for 17- and 19-inch monitor panel prices have fallen significantly. Although prices for the two segments are not likely to stop dropping in July, the prices will eventually stabilize and even pick up by US$1-2 in August. In fact, we remain optimistic about demand in the second half. The panel industry will swing from an oversupply ratio of 6% in the second quarter to a balance point in the third quarter, with a tight supply ratio of 1% to occur in the fourth quarter.
In fact, this year will follow the same pattern as those in previous years. The large-size panel industry always worsens when demand is weak, but the industry will eventually bottom-out. After that, demand always picks up because of already-significant price drops and reduction of production.
For TV panel prices, however, we expect to see prices for the segment to keep falling throughout 2006. Q: Among large-size LCD TV panels, various panel makers have been promoting different segments. For example, both Samsung Electronics and Sony are working to push the 40-inch segment with panels produced at their seventh-generation (7G) plants. LG.Philips LCD, AUO and Chi Mei Optoelectronics (CMO), on the other hand, are betting on both 37- and 42-inch panels from their 7.5G plants. What is your viewpoint on the 37-inch and 40/42-inch panel competition?
A: We expect to see coexisting 40/42-inch panel dominance in the future, as opposed to the 32-inch panel segment, the current mainstream size. Sony and Samsung are doing very well with their 40-inch panels and TVs, as capacity ramp up at their 7G plants are faster than those from their competitors and their pricing strategies have been especially successful.
Looking at the 42-inch segment, we are also very confident about its competitiveness since AUO, CMO and LG.Philips LCD will push the segment. The 37-inch segment, however, may be squeezed between 32- and 40/42-inch panels, as mature markets are ready to adopt larger-size TV panels.
In fact, the adoption of the 40/42-inch segment is much faster than we previously imagined. Originally, we expected prices for 40/42-inch LCD TVs would not come down to the US$2,000-2,500 range until the end of 2006. However, prices for the segment fell to US$2,500 in May 2006.
As a result, we expect shipments for 40/42-inch panels to reach 15 million units by 2010, up from only 1.2 million in 2005. Its penetration of the LCD TV panel market will reach 36% by then, with the 37-inch and above segment to account for 48% of the overall LCD TV panel market. Q: Besides promoting large-size TV panels at FPD Taiwan 2006, Taiwan's major panel makers are also showing a variety of widescreen panels for monitors and notebooks. What is your viewpoint on the trend?
A: We are definitely optimistic about the adoption of widescreen models for monitors. The adoption of widescreen ratios for notebooks has been smooth and this will help the adoption of widescreen monitor panels as well. The full line-up of widescreen models at the panel makers show their choice to develop niche products (larger-size widescreen models) during a down side of the crystal cycle.
Nevertheless, the penetration of widescreen monitor panels will not reach 10% until next year, with the penetration percentage reaching at most 7% in the fourth quarter of this year, up from a mere 2% in 2005. This is because the panel makers have not been aggressive in cutting prices for their widescreen models.
Prices for 19-inch widescreen panels, for instance, are still US$10 more expensive than regular ones. Among aggressive price reductions for 17- and 19-inch monitor panels, it is still hard for the widescreen versions to become dominant in the market. Q: You have mentioned panel makers used strategies such as focusing on niche products during a slow season. Besides rolling out new products, some of them are cutting their production to stay competitive while others have chosen mergers. Can you comment on the various possible strategies for panel makers?
A: It is very wise for AUO and LG.Philips LCD to rethink their capacity expansion in an oversupply situation. The merger between AUO and Quanta Display (QDI) is also an appropriate decision at the right time.
Panel makers need to expand next-generation capacity to stay competitive. However, price cuts and inventory build up are hurting panel makers' profitability. Therefore, second-tier panel makers can no longer benefit from price competition. It is either consolidation or getting out of the market. Japan-based panel makers have exited the market one by one when faced with an unpromising industry outlook. Taiwan-based panel makers need to start thinking about how to survive the cycle.
First-tier panel makers are still going to dominate the large-size panel industry, as they are better in component cost down, quicker in expanding capacity and have a better product portfolio. The same characteristic applies to first-tier makers in Taiwan and South Korea. They can easily switch between different applications to survive tough times.
Sharp, the major large-size panel maker in Japan, is an exception. The maker always makes sure it stays ahead in large-size TV panel production. By focusing on the large-size TV panel market, Sharp manages to have strong profits. In addition, a wide range of major component makers in Japan helps Sharp to remain very cost effective. Q: How about China-based panel makers such as Shanghai SVA-NEC Liquid Crystal Display (SVA-NEC) and Beijing BOE Optoelectronics Technology (BOE OT)? Are they able to stay competitive? What may be their future focus?
A: The China TFT LCD industry is very special in the choice of positioning. Companies such as SVA-NEC and BOE OT are still aiming at the monitor panel market when their competitors in Taiwan, Japan and South Korea can't wait to migrate to larger-size LCD TV panels. SVA-NEC is betting on the 15-inch segment while BOE OT aiming at the 17-inch one.
China-based panel makers are actually doing pretty well in their respective focus. Targeting the monitor segment, the panel makers can still benefit out of the abundant quantities the market still needs. Sweta Dash has covered the LCD and projection display industries since the early 1990s. She has more than fifteen years of experience tracking electronic display, semiconductor, and computer markets. At iSuppli, Sweta is the research director and lead analyst for LCD and projection display market reports and services. Her scope of research includes data analysis, market forecasting, and predicting future market and technology trends. Sweta is the author of numerous papers and she has spoken extensively at various industry conferences. She has a Bachelors of Arts degree with honors and Master of Arts degree in Economics from University of Toronto, Canada.
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Prices for 32-inch TV panels fall below US$400
19 June 2006
Taiwan panel makers, including Chi Mei Optoelectronics (CMO) and HannStar Display, have reduced their prices for 32-inch LCD TV panels to less than US$400, lower than the US$400 level that LG.Philips LCD (LPL) earlier approached, according to industry sources.
In an attempt to release their inventory clearance in the TV segment before demand picks up in the third quarter, the Taiwan panel makers recently lowered prices for 32- and 37-inch TV panels by up to US$30, compared to their May prices, indicated the sources.
For the 32-inch LCD TV segment, CMO and Chunghwa Picture Tubes (CPT) currently each have inventory turnover days of finished and half-finished products (combined) of almost one month, the sources found. Although AU Optronics (AUO) has lowered its inventory turnover days to 7-14 days, the higher inventory levels at Quanta Display (QDI) may extend the timeline, the sources added.
The sources expect that demand will pick up from the third quarter and rising orders will stop panel prices from dropping further from August.
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LCD panel prices drop to record lows
20 June 2006
Panel prices dropped to record lows across all segments in late June, but PC panels may rise in August because of back-to-school demand, according to WitsView Technology.
Panel pricing released by WitsView today indicated that the average selling price (ASP) for 17-inch monitor panels dropped U$3 to US$104 compared with prices in the first-half of June. The ASP in the 17-inch segment is already lower than the production costs at first-tier panel makers, according to WitsView, and the ASP is under pressure to drop further.
In the notebook panel segment, the ASPs for 15.4 widescreen and 15-inch panels both dropped to US$100, while 14-inch widescreen panels saw its ASP fall to US$97.
WitsView indicated that PC panel prices could bottom out in August when inventory pressure should ease to normal levels and back-to-school demand should kick in.
TV panel prices also dropped sharply. Prices for 32-inch and 37-inch panels both decreased US$25 to US$410 and US$610, respectively.
TV panel pricing will remain weak in June and July because World Cup-generated demand is finished. Demand for TV panels may again pick up in August because of the Christmas shopping season, according to WitsView.
However, fierce pricing and increased supply in the TV segment will see ASPs for TV panels continue declining through the end of the year, the research firm said.
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LCD closing price gaps with PDP in the 40-inch range, says TSR
23 June 2006
Prices of 40-inch WXGA LCD panels are now nearly at the same level as that of 42-inch 720p PDP (plasma display panel), according to Japan-based research firm Techno Systems Research (TSR).
Prices of 40-inch LCD panels were US$850 while 42-inch PDPs were priced at US$720 in the first quarter of 2006, compared to a price gap of more than US$100 between the two before 2005. Prices for 40-inch LCD panels will drop to US$750 in the second quarter of 2006, compared to US$690 for 42-inch PDPs, the research firm said.
