Large-area panel makers looking for more growth

Large–area TFT LCD panel shipments declined in both Q4’11 and Q1’12, reflecting adjustments in supply chain inventories. However, with brands and OEMs increasing orders and with panel makers increasing capacity use, Q2’12 shipments are expected to grow by double digits.

This, along with the recent panel price rebound, indicates the recovery of the TFT LCD industry.

According to the NPD DisplaySearch Quarterly Large-Area TFT LCD Shipment Report - Advanced LED, large-area (9″+) TFT LCD shipments fell by 3% Q/Q in Q1’12 to 170.2 million. However, the report forecasts that shipments are expected to make a strong recovery in Q2’12 to 189.6 million, up 11% Q/Q and 4% Y/Y.

In Q1’12, shipments for each of the three major applications - notebook PCs, desktop monitors and TVs - showed Q/Q declines. The first quarter is traditionally a slow one for panel purchases, as downstream companies are conservative in panel purchases while making inventory adjustments.

However, tablet PC panels continued to show strong momentum, with 18% Q/Q growth, driven by 9.7″ shipments.

In Q2’12, the tablet PC application is expected to continue to show the strongest growth. Apple’s recent release of its latest iPad with QXGA resolution has encouraged panel makers to expand shipments in Q2’12.

Shipments of panels for notebook PCs and desktop monitors are expected to grow by 9% and 2% in Q2’12.

Large-area TFT LCD shipment revenues are expected to increase to $20.6 million, up 14% Q/Q, marking the first time in the past three quarters that the industry has experienced positive revenue growth.

“The TFT LCD industry has experienced unprecedented changes after a longstanding oversupply accompanied by falling panel prices. Panel makers are restructuring and adding new technologies and processes to reduce costs and enhance performance,” notes the report. “The elements are in place for 2012 to be a year of gradual recovery, as panel prices rebound and shipments increase. Shipment units, shipment area and revenues are all expected to grow by double digits in Q2’12.”

LED backlight penetration reached 59.2% of LCD TV panel shipments in Q1’12. According to the plans of panel makers, this figure will reach 60% in Q2’12 and 70% in Q4’12. These targets account for scenarios in which panel makers ship the cell and open cell only and downstream companies assemble the backlight unit together with the module.

Many panel makers and LCD TV set makers have developed a lower-cost, direct-type LED backlight, targeted at at the market segment that prioritises panel cost over thickness. The analysts estimate that direct-type LED backlit panels will grow to 17% of all LCD TV panel shipments in Q4’12.