The large-sized LCD panel market rose to 129.7 million units in the second quarter, up from 91.7 million in the first quarter. This follows sequential declines of 2.3 percent in the third quarter, of 18.6 percent in the fourth quarter of 2008 and 2 percent in the first quarter of 2008.
iSuppli defines large-sized LCD panels as those having a diagonal dimension of 10-inches or larger.
“On the demand side, strong sales in China spurred by a government stimulus program propped up sales in the first half,” said Sweta Dash, senior director for LCD research at iSuppli. “Meanwhile, notebook panel demand recovered in the second quarter and global LCD-TV sales remained strong.”
Low inventories throughout the supply chain, combined with the severe cut in LCD fab utilization rates and production, pushed the market to tight supply beginning in the first quarter of 2009. As a result, panel prices have been increasing since the beginning of 2009, especially for monitor and TV panels, although these prices were still below manufacturers’ costs.
However, while shipments rose on a sequential basis in the second quarter, the market actually declined in the first half compared to the same period in 2008.
“A full recovery in the large-sized LCD panel market is expected in the second half of 2009, when strong panel demand combined with higher prices will bring the market back to profitability and revenue growth,” Dash said.
Global shipments of large-sized LCD panels in the third quarter of 2009 will rise by a robust 28.9 percent compared to the same period in 2008. Shipments in the fourth quarter will growth by an even more impressive 57.1 percent from the same quarter in 2008.
For the full year of 2009, large-sized LCD panel shipments will rise to 516.7 million units, up 18.6 percent from 435.7 million units in 2008.
However, large-sized LCD panel revenue for all of 2009 is still expected to decline by 8 percent compared to 2008 due to the below-cost pricing throughout the first half of 2009. Revenue in 2009 will amount to $67.2 billion, down from $73.1 billion in 2008.
The figure presents iSuppli’s forecast of quarterly, global shipments for large-sized LCD panels.
Source: iSuppli, July 2009Healthy inventories
Large-sized panel inventory remained at low to normal levels in the second quarter. Inventory is expected to remain healthy until the third quarter.
Panel inventory is expected to remain low, given that panel suppliers worried about overbooking will be controlling panel shipments to prevent inventory from building up at buyers. But panel buyers are starting to pull in orders in preparation for expected tight supply in the third quarter of 2009.
China’s strong LCD-TV growth
The Chinese government’s rural subsidies program has increased TV demand in China. Now that the program has been extended to nine cities, growth is expected to continue through future quarters.
Television panel demand, especially from domestic brands, is expected to be strong in the third quarter to support strong growth expectations.
Branded TV manufacturers are beginning to offer discounts on new models in the United States, especially sets based on LED backlights and products with higher frame rates such as 120Hz and 240Hz.
More aggressive television set pricing, combined with stabilization in the global economy, will drive further demand in the second half of 2009. Television panel demand, excluding monitor panels used for TVs, is expected to reach 130 million units by the end of 2009, up 28 percent from 2008.
Notebook panel demand recovered in the second quarter after a slowdown in the first due to the introduction of notebook product based on Intel Corp.’s Consumer Ultra Low Voltage (CULV) featuring a thinner form factor, 16:9 format panels and LED backlight.
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