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In 2H16, New LTPS Capa. Has Been Gradually Added, so M- & H-end Smartphone Module Prices Are under Downtrend Pressures
Published May.31 2016, 03:25PM (GMT+8)

According WitsView's latest statistics, Market Confidence Index (MCI) declined 206.8 points, from 4143.2 points to 3936.4 points during the period from April 6th to May 16th, 2016. In the first quarter of 2016, the USA's personal consumption expenditure grew 1.9% QoQ. This has been the lowest point since the first quarter of 2015, and it apparently shrank from the growth rate of 2.4% from the fourth quarter of 2015. Personal consumption expenditure that occupied nearly two-third of USA's gross domestic product (GDP) was weak. Moreover, strong US dollars lowered export trade and the US domestic private investment. Therefore, in the first quarter of 2016, the US GDP merely grew 0.5%, lower than the market's expectation 0.7%.Markit's composite PMI index in April in the European Union dipped 0.1 when compared with March's, reaching 53. Amid them, manufacturing PMI dipped 0.1 and came to 51.5. This was lower than what the market expected. Although the Eurozone economy has not recovered its growth, it will encounter the referendum whether Britain would exit the European Union. If Britain indeed exits the European Union, it might trigger a chain reaction. Economy of the European union has been full off unknown variables, such as the time bomb of Brexit referendum, pouring in refugees, Grexit which might be caused by Greece' financial issue. If the three crisis take place all at once, European Union might spread itself too thin, and its economy will plunge.

 

General administration of China customs announced that the March trade data of China were 160.81 billion US dollars, up 11.5% YoY. This was a break of 8 consecutive months decline.For importing trade, though it declined 7.5% YoY, reaching 130.956 billion US dollars, the drop scale has been obviously slowed down.Chinese official manufacturing PMI in March slightly rose 1.2 percentage points from February's 49, reaching 50.2 percentage points and returned to the expansion area.Notably, even if Chinese manufacturing PMI and service industry PMI both surpassed the threshold 50, China's employment index did not rise.Contrarily, March's employment index was 48.9. This has been the first time falling into shrinking area since August 2013. Based on that fact, we concluded that China's economy recovery has not been stable.Japan's March CPI surprisingly declined 0.3% YoY, came to 103.3. This was far below market's expectation, -0.2%. This was also the largest drop of Japanese CPI for the past three years. The core CPI (defined as all items less fresh food) decreased 0.3% YoY, coming to 102.7.Japan's April inflation rate was affected by the key inflation indicator, CPI, so its inflation rate fell from previous 0.3% to -0.1%. Thus, Japanese economy was risking deflation again.If Japan is in deflation for the long run, its investment and production would be suppressed. This might cause unemployment to rise and cause economy recession. Bank of Japan might further utilize negative interest rate policy to prevent Japanese economy to be trapped in deflation.

 

In May, in order to satisfy China's mid-and-high-end smartphone demand, previous investment in LTPS fabs of panel makers (such as Innolux, AUO, Tianma, and JDI) will enter mass production in 2H16. According to WitsView's April smartphone panel price report, mid-and-high-end smartphone modules' prices all dropped. 5.2" FHD LTPS module's average selling price (ASP) declined from US$14 in March to US$13.7 in April, down 2.1% MoM.5.5" FHD LTPS module's APS slid 2.1% MoM from March, reaching to US$14.2. 5.7" FHD LTPS module ASP decreased 1.8% MoM, coming to US$16.7.Even the high-end was no exception of price dropping. 5.7" QHD LTPS module's ASP went down 1.6% MoM this month, coming to US$30. According to WitsView, in 2H16, new LTPS capa. continued to enter mass production. The pressure to drop price for mid-and-high-end smartphone modules will increase. Mid-and-high-end smartphone module ASP might decline month by month.

 

 

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