Date: 21/02/2012

Slow growth of emerging markets affecting display panel market

IHS has estimated Worldwide Small and Medium Panel shipments in the final month of 2011 amounted to 191.6 million units, down 7.4 percent sequentially on top of a 6.2 percent contraction in November and a 1.8 percent decrease in October.

Key findings shared by IHS:
The shipment total from six Taiwanese suppliers tumbled 6.3 percent to 160.3 million units during the period, while combined shipments from two rival South Korean suppliers suffered a more dramatic decline of 13.1 percent to 31.3 million units. The suppliers from Taiwan are Chunghwa Picture Tubes Ltd., ChiMei Innolux Corp., HannStar Display Corp., Wintek Corp., AU Optronics Corp. and GiantPlus Technology Co.; the South Korean suppliers consist of Samsung Display Co. and LG Display Co.

Also in recent developments, Chinese vendors like Tianma Microelectronics and BOE Display Technology are resorting to aggressive panel pricing to reach out to consumer electronics brands as well as to domestic labels, including the so-called white-box makers that proliferate in China. The strategy will help the Chinese display suppliers expand their share of the price sensitive, mid-entry level handset market.

Chinese suppliers also have shown interest in diversifying their product portfolios in 2012 to include technologies such as in plane switching (IPS)/advanced fringe field switching (AFFS) and active matrix organic light emitting diode (AMOLED) displays.

Shipments in the first quarter of 2012 are expected to see a further sequential decline as slower market conditions set in. Moreover, weakness in the global economies and a general slowdown in the economic growth of China and India two fast expanding areas for SMD panels will continue to create uncertainties in the device and display markets for the first half of the year.

Overall, smartphone and tablet PC displays will remain the key drivers of display demand growth. The likely launch by Apple Inc. of its next generation iPad and iPhone in March and June, respectively as well as the introduction of similar competitive offerings from other vendors should keep demand strong for higher resolution and larger displays, driving up average selling prices (ASP) for specific applications in the process. In contrast, ASPs will not show any improvement but will continue to fall for displays designed into existing products and entry level items, especially in the China white box market.

Among tablet PC displays, ASPs fell 1 percent in December to $49.19, with the smaller 7.x-inch tablet display sizes launched by both Amazon and Barnes & Noble also contributing to the drop in average prices. Looking forward, Amazon is likely to launch a larger 8.x-inch or 10.x-inch display in its next generation tablet product, but Apple may be looking at a smaller 7.85-inch iPad. Such market dynamics in display size, resolution and shipment volumes will combine to exert a discernible impact on average display prices in the industry.