LCD TV panel shipments expected to slide

Over the past few months, TFT LCD panel makers have been controlling production to minimise inventories and reduce losses. Despite this, the DisplaySearch MarketWise-LCD Industry Dynamics report shows an increase in loading rates in October, to 75 from 68% in September.

The rise in October fab loading rates mainly came from Korean panel makers, who increased loading to 84-85%, aiming to fulfil demand in October (the peak month in the year). The increase mainly stemmed from TV panel production to meet increased LCD TV orders for Q4’11, especially for Samsung.

In addition, both LG and Samsung are increasing shipments to Chinese users, with consecutive monthly shipment growth in November and December.

Taiwanese panel makers also raised their fab loading rates in October, but are only at a 65% loading rate on average and plan to operate at the same level in Q4, reflecting the cautious outlook of their TV users and a prioritisation of finances over market share. Japanese panel makers are still struggling with inventory issues and have made further cuts in fab use for Q4’11.

Loading rates differ by fab generation, with Gen7/7.5 increasing to 86% in October, up from a record low of 76% in September, and Gen8/8.5 increasing from 64 to 72%.

Large-area panel shipments, particularly for LCD TVs, are likely to show a peak in October and decline by 2% M/M in November before scaling down significantly at the end of the year.