Impacted by the shortage in labor, components, and the number of working days, panel shipments slid by 12% in February

by WitsView on Mar.11 2010

According to WitsView’s latest survey, global large-sized panel shipments (including the 8.9-inch and above) slid by 12% MoM to 44.34 million units in February 2010. The decline was mainly due to the effect of Chinese New Year (CNY) holiday: First, the actual number of working days is only about two weeks in February. Second, this year, China faced serious labor shortage problems both before and after CNY holiday; hence, downstream customers’ demand was reflected in January, ahead of schedule. Third, tight supply of several panel components, such as polarizers and IC, continued. As a result, overall shipment in February recorded a double-digit decline. In terms of annual growth rate, shipments in February rose by 58.5% compared to the same period last year when the economic was on a gradual recovery post-financial downturn; therefore, the base volume during that period was relatively lower.

In February, shipments of all three applications declined due to the aforementioned factors related to CNY holiday. Of which, TV panel shipments fell by 10.1% MoM to 13.87 million units; monitor panel shipments slid by 16.6% MoM to 15.15 million units; netbook panel (<12.1”) shipments decreased by 14.3% MoM to a mere 3.2 million units; notebook (>12.1”) panel shipments fell by 7% MoM to 12.12 million units.

Table 1: TFT-LCD Panel Shipment in Feb-10 (K units)

The aggregated area shipment in February declined by 10.6% MoM, from 8.69 million square meters to 7.77 million square meters; compared to the same period last year, the growth rate is 65.5% YoY. Of the 3 applications, monitor panel shipments fell by 16% MoM to 1.845 million square meters; TV panel shipments slid by 9% MoM to 5.01 million square meters; netbook panel (<12.1”) shipments decreased by 11.8% to 102 thousand square meters; and notebook (>12.1”) panel shipments fell by 6.2% to 813 thousand square meters.

Table 2: TFT-LCD Panel Area Shipment in Jan-10 ( K square meter

LCD TV panel

Affected by the early restocking in preparation for CNY holiday sales, global TV panel shipments fell by 10.1% MoM to 13.87 million units in February, ending the 13 consecutive months of record gains. However, compared to the same period last year, the growth remained robust at 82% YoY, demonstrating that the momentum of LCD TV gradually replacing CRT TV is still strong. Size-wise, ratio of <26’’ TV panels maintained at 22%; mainstream 32"W was fairly stable, accounting for 42% market share; however, ratio of >40”W panels rose by 2.3%, accounting for 30.7% of the total, thanks to brand customers’ introduction of new products and LED TVs. On the other hand, affected by the increase in the ratio of large-sized TVs, ratio of 37”W dipped 2.6%.

Notebook Panels

In February, netbook panel (<12.1”) shipments decreased by 14.3% to a 3.2 million units, and notebook (>12.1”) panel shipments fell by 7% MoM to 12.12 million units. In 1Q10, restocking of notebook panels was of a lesser extent compared to that of other applications, therefore, its rate of decline in February is relatively narrower, which allowed notebook panels to sustain their price trends.

Although their respective annual growth rates reached 115% and 76.6%, this is also due to the low base period in the same time last year. Sizes-wise, 15.6"W continued to secure its No. 1 position, accounting for 33.9% share. As 14.1"W (16:10) is gradually being replaced by 14"W (16:9), 14.1"W ratio reduced by 2.2%, whereas 14"W ratio added 2.6%, accounting for 17.6% share.

LCD Monitor Panels

In February, global monitor panel shipments declined by 16.6% MoM to 15.15 million units, the sharpest decline among all three applications; YoY growth rate reached 26%. In addition to reduced monitor panel shipments during CNY holiday, monitor panel demand was not as bullish as expected due to weaker downstream sales momentum. No significant changes were observed in most sizes. Those that increased in ratios were 23.6”W (+1.8%), 19”W (+1.3%), 27”W (+0.7%), 18.5”W (+0.6%), and 22”W (+0.5%). On the other hand, ones that declined were: 24"W with 16:10 aspect ratio (-1.9%), the largest decrease, followed by 17"(-1.4%), and 20"W (-1%).

Conclusion

On the whole, panel shipments were negatively affected by the macro environment. On the other hand, triggered by the weaker-than-expected actual sales performance during CNY holiday, the end-market is buzzing with concerns of a potential panel price decline. It is projected that in March, panel demand in China will likely weaken subject to the inventory clearing in the China. Nonetheless, customer demand in Europe and US should be taken into consideration in determining the overall market trend.

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Impacted by the shortage in labor, components, and the number of working days, panel shipments slid by 12% in February

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