Display Search: Large-Area TFT LCD November Revenues Fall to Lowest Level in Two Years (January 6)

AUSTIN, TEXAS - In November, shipments of large-area TFT LCD panels reached the lowest level since May 2007, according to the DisplaySearch Monthly TFT LCD Shipment Database. Specifically, shipments were 28.5 million units, down 21% M/M and 25% Y/Y. November revenue for large-area TFT LCD panels fell to $3.8 billion, down 24% M/M and 50% Y/Y, the lowest level since July 2006.

DisplaySearch also found that panel demand has weakened significantly in all three of the major TFT LCD applications—notebook PCs, monitors and TVs—and panel suppliers have reduced capacity utilization. Notebook PC panel shipments were 8.5 million, down 25% M/M and 23% Y/Y, which is the lowest level since May 2007. Monitor panel shipments were 10.9 million, down 22% M/M and 33% Y/Y, which is the lowest level since June 2006. TV panel shipments were 8.0 million, down 17% M/M and 16% Y/Y, which is the lowest since September 2007.

A combination of slow demand, the tendency of leading brands to favor internal sources of supply, and depreciation of the Korean won has disadvantaged Taiwanese panel suppliers, leading to loss of market share. Korean suppliers had more than half the market share in November, a dramatic increase over just two months earlier.

In November, LG Display was the leader in units shipped, with 26% market share, while Samsung led in area with 29.4%. Both shares are the highest level for the leading suppliers in four years.

In terms of application market share, LG Display led in notebook with 33.3% unit share, followed by Samsung at 28.2% and AUO at 21.6%. Samsung led in monitor with 22.2% unit share, followed by LG Display at 21.9% and AUO at 15.1%. Samsung led in the TV with 27.9% unit share, followed by LG Display at 26.2% and Sharp at 17%.

Weak demand is also impacting shipments of small/medium TFT LCDs. DisplaySearch's report indicates that November shipments from Korean and Taiwanese suppliers fell to 41.3 million units, down 44% M/M and 39% Y/Y, which is the lowest level since May 2007. Meanwhile, small/medium TFT LCD revenues for Taiwanese and Korean suppliers fell to $337 million, down 42% M/M and 51% Y/Y, which is the lowest level since April 2007.

"The TFT LCD industry is going through the hardest time in a decade, as shipments and revenues dramatically decline," commented David Hsieh, Vice President of DisplaySearch. "To cope with the weak demand, capacity utilization for Taiwanese panel manufacturers is below 60%, Korean manufacturers are reducing utilization to less than 80%, and Japanese manufacturers are re-adjusting fab allocations.

"Currently, most panel prices are below cash cost, and some lower than the BOM (Bill of Materials) cost. However, the biggest challenge may be in Q1'09, since downstream demand is unclear as long as panel prices continue to fall. The industry will need to take additional steps to reduce capacity utilization, since falling panel prices are not stimulating demand under the current economic conditions. Continuing to reduce panel prices will cause continued pain for the whole supply chain, including panel makers, materials makers and set makers."