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Rise of LCD-TV brings seasonality to large-sized LCD panel market, says iSuppli
Demand for large-sized LCDs, i.e. panels 10-inches or bigger in the diagonal dimension, was strong in the third quarter, with indications that sales remained healthy through November. Television manufacturers have been snapping up panels, despite increasingly tight supplies. However, iSuppli predicts the LCD market will enter a state of oversupply in December as demand cools—a situation that will continueinto the first quarter of 2008. From there, demand for large-sized LCD panels will begin to ramp up in the second quarter of 2008, with brisk sales continuing up to the fourth quarter. This follows the seasonal pattern of the television business, with manufacturing rising in the pre-holiday season and peaking in November, then undergoing a slowdown until the second half of the year, when activity starts picking up again. The major factor driving this seasonal pattern is the television manufacturers' Christmas build period at the end of each year. In the second quarter of 2008, LCD-TV panel demand is expected to be strong due to the Olympics. This contrasts with the situation in the past, when oversupply/undersupply situations were driven by factors within the large-sized LCD panel business, i.e. the rate of production increases among manufacturers. However, if you think a move toward seasonality means that a new era of predictability is at hand for the large-sized LCD panel market, think again. According to Sweta Dash, director of LCD and projection research at iSuppli, speaking at FID yesterday, "Because there are so many other factors involved in the LCD market other than television—including monitors and notebooks gaining greater acceptance in the consumer space—it won't necessarily mean predictability is guaranteed. There still could be events that will make panel suppliers tighten or loosen the production reins, sending the whole market into a spiral."
Hitting the 100-million-unit milestone Large-sized LCD unit shipments in 2007 will amount to 80.5 million units before hitting the milestone of 102.5 million units in 2008. In terms of revenue, LCD-TV panels will grow to $52.9 billion by 2011, increasing at a CAGR of 19.0 percent from $22.2 billion in 2006. The chart below presents iSuppli's forecast for both LCD-TV panel unit shipments and LCD-TV panel revenue for the period of 2006 through 2011. iSuppli Figure: Worldwide LCD-TV Panel Shipment and Revenue Forecast, 2006-2011 (Thousands of Units, Millions of U.S. Dollars)
The factors pushing the panel market over the 100-million-unit mark in 2008 include:
Dash concludes, "The last factor may represent a bone of contention for some, however, Historically, the Olympics have never been much of a pull for television buyers," Dash said. "This Olympics will be no different for the U.S. and European markets as they won't have much of an impact. But it is in China and other parts of the Asia/Pacific region where there is likely to be a significant bump in terms of sales as people rally around hosting the Beijing games." For more information, please contact: www.isuppli.com.
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