Global revenue from shipments of large-sized LCD panels used in televisions is set to rise to $49.2 billion in 2010, up 40 percent from $35.2 billion in 2009. The projected revenue increase for this year follows a 5.2 percent decline from 2008 to 2009.
Coming in concert with the rise in revenue is a resumption of profitability for the LCD-TV panel market.
Overall, the industry bounced back to a 10 percent profit margin in the third quarter of 2009 after successive quarters of negative performance. Suppliers had their first setback in the third quarter of 2008 when sales of 32-inch panels, the most popular LCD-TV size, yielded zero profitability. This was followed by a loss of 23 percent in the fourth quarter of 2008, and then succeeded by negative margins of 31 percent and 12 percent, respectively, in the first and second quarters of 2009.
That tide of decline has reversed, and profitability for 32-inch LCD-TV panels is now expected to continue to rise throughout 2010, reaching 25 percent in the fourth quarter.
“Revenue growth and profitability in the global LCD-TV panel market in 2010 will be driven by rising demand, the shift to larger-sized displays, the accelerating sales higher-value panels and increased manufacturing efficiency,” said Sweta Dash, senior director, LCD Research, for iSuppli.
“These higher-value panels sport features including LED backlighting, full high-definition resolution and faster refresh rates of 120Hz and 240Hz. Furthermore, television brands in 2010 are planning to focus on 3-D solutions that will lead to faster adoption of higher-frequency panels such as 240Hz. On the supply side, increased production efficiency from 8.5 and higher-generation fabs are also going to make larger-size TVs more affordable for the consumers. Furthermore, suppliers are set to cut costs by reducing the number of components used in TV panels, further bolstering profit margins.”
LED backlighting leads to profits
After a rocky start, sales of panels using LED backlights are now rising and helping to drive improved profitability for the large-sized LCD panel business.
In the early phase of the adoption of LED-backlit LCDs in the first quarter of 2009, suppliers sold these panels at prices below their manufacturing costs because of the general oversupply in the market. While this helped drive adoption of LED-backlighting technology, it also exacerbated losses among suppliers.
However, higher demand combined with supply constraints will lead to panel price increases and improved revenue growth opportunities for panel suppliers.
Global shipments of LCD-TV panels using LED backlights are set to rise to 25.4 million units in 2010, up by more than a factor of five from 4.8 million in 2009. By the fourth quarter of 2010, 25 percent of shipped LCD-TV panels are expected to have LED backlights.
Source: iSuppli, USA
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