Global large-sized panel shipments dropped by 4.6% to 156M units in 3Q10
Overall Panel Shipment Review for 3Q10
The global large-sized panel shipments reached the record high in 2Q10. However, in the traditional hot season in 3Q10, the shipments fell by 4.6% QoQ to 156M units, having a 7.2% YoY increase, which mainly attributed to the fact that panel demand was strong in 1Q10 among downstream customers, so an insufficient supply was forecast for 3Q10 panel shipments. Accordingly, they restocked earlier in 2Q10, leading to the rising inventory level. Meanwhile, the Europe’s market was impacted by the debt crisis; additionally, the slow recovery in the global economy slashed end-market demand. As a result, the back-to-school demand in the US and Europe was weaker than expected in 3Q10, reducing the demand for panel shipments significantly and posting a weaker hot season.
Of three applications, in response to the increasing demand during China National Day holiday and for the year-end hot season, panel demand from downstream TV customers continued to increase. In addition, since the profitability level of TV panel was better than that of IT panel, panel makers hoped to expand TV panel shipments to compensate the loss from IT panels, which stimulated TV panel shipments to grow by 9.1% QoQ in 3Q10. Furthermore, downstream customers planned to switch from air transport to ocean shipping, so notebook panels were restocked early in 2Q10 for the 3Q10 demand. As a result, notebook panel demand dropped by 12.4% QoQ while entering 3Q10. Monitor panel shipments fell by 13.2% QoQ since the back-to-school demand was worse than expected, leading to high inventory level among downstream customers. Netbook panel shipments fell by 15.7% QoQ because of the rise of tablets which slashed netbook demand at end market. On the contrary, benefitted from the booming sales of Apple iPad, panel makers continued to increase tablet panel shipments which soared by 90.3% QoQ.
Table 1: TFT-LCD Panel Shipment in 3Q10 (K units)
TV panel shipment
In 3Q10, worldwide LCD panel shipments increased by 9.1% QoQ to 54.38M units, having a 33.8% YoY. Downstream customers continued to restock for 4Q10 hot season. Additionally, while the supply of the components on LED BLUs gradually turned more sufficient among panel makers, the penetration rate of LED TV panel shipments began to surge. Panel makers intended to compensate the loss from TV panels, whose price decline extended in 3Q10, through the price gap between LED and CCFL models. Size-wise, ≦26” shipment ratio increased from 22.4% to 23.6%, showing that the certain demand remained for small-sized and entry-level models under the slow recovery in the global economy. In ≧32” models, 32” shipment ratio went down from 42% to 40% whereas 40” and above shipment ratio rose from 30.8% to 31.5%.
Monitor panel shipment
In 3Q10, the worldwide LCD monitor panel shipments dropped by 13.2% QoQ to 46.4M units, and fell by 11.2% YoY. Size-wise, in <20”W panel shipments, 18.5”W shipment ratio fell from 21.7% to 18.4%, which posted the largest decline by 3.3% QoQ; 19”W shipment ratio decreased from 18.1% to 17.0%. ≧20”W panel shipment ratio rose from 44.8% to 47.5%, reflecting that since the price decline of large-sized panel was softer than that of small-sized panel, panel makers preferred to increase large-sized panel shipments; additionally, downstream customers intended to expand the procurement ratio because the prices of large-sized panel became cheaper in 3Q10 after its decline compared to the prices in 2Q10. Of which, shipment ratio of 21.5”/21.6”W grew from 12.9% to 14.1%, posting the largest increase by 1.2% QoQ.
Notebook panel shipment
In 3Q10, notebook and netbook panel shipments dropped by 12.4% QoQ and 15.7% QoQ to 41.04M and 8.95M units respectively. Notebook panel shipments increased by 4.5% YoY while netbook panel shipments slid by 33.2% YoY. Relatively, tablet panel shipments reached 52.25M units, having an up to 90.3% QoQ growth, which not only reflected the iPad fad, driven by Apple, but also cannibalized netbook market, and weaken netbook panel demand.
In terms of notebooks, the impact from Europe debt crisis in 2Q10 weakened end-market demand substantially. On the other hand, in order to save freight cost, downstream customers increased the ratio in ocean shipping, and restocked early in 2Q10. Yet, the back-to-school demand in 3Q10 was worse than expected, the inventory pile-up weakened notebook panel shipments which dropped by 12.4% QoQ. Size-wise, the prices of mainstream notebook panel fell below the cash cost in 3Q10, so panel makers reduced the shipments in order to avoid expanding the loss –15.6”W shipment ratio decreased from 35% to 34.9%; 14.0”W fell from 20.0% to 18.2%. Relatively, the shipment ratio of 16:10 models added from 11.2% to 11.8% because of the certain demand in commercial market.
Regional TFT-LCD Panel Shipment
Regional large-sized TFT-LCD panel shipments in 3Q10 – due to the weak demand, panel makers in Taiwan, Japan and China reduced the glass input; thus, the market share of panel shipments from Korea panel makers added by 3.5%. Firstly, in response to the weakening IT panel demand, Taiwan panel makers took the lead in cutting the input capacity, so their market share of netbook and monitor panel shipments fell by 6.5% and 2% respectively, and the market share of the overall shipments, fell from 43.7% to 40.8%. Moreover, China panel makers reduced production as well since IT panel prices fell below the cash cost in 3Q10 – the market share of monitor and notebook panel shipments decreased by 1.7% and 0.4% respectively, and the overall market share dropped from 5.3% to 4.6%. In Japan, Sharp also cut the input capacity in response to the appreciation of yen. The market share of Sharp’s TV panel shipments declined from 10.3% to 9.4%. Relatively, Korea panel makers did not take action to reduce the glass input significantly in 3Q10, and the ramp-up of tablet panel capacity drove the QoQ shipment growth in individual applications. Hence, the market share of overall shipments rose from 47.8% to 51.3%.
Table 2: Regional TFT-LCD Panel Shipment (unit base)
3Q10 Panel ASP by Unit – since panel demand turned weaker, the price decline in individual applications expanded QoQ. Of which, notebook panel fell from $59 to $50, posting the largest decline by 16%. The overall ASP decreased by 5% to $115 from $121. In terms of panel ASP by area, the ASP of per square meter fell by 11.2%, falling from $706 in 2Q10 to $627 in 3Q10.