Large-sized panel shipment increases 9% to 405 million units in 2008, reports WitsView

Taipei, January 21, 2009---According to WitsView, a total of 405 million large-sized panels were shipped in 2008. Compared to the 371 million figures in 2007, this amounted to a YoY growth of 9%. TVs increased 19.4% YoY to 97.47 million units. Meanwhile, NB grew 17.4% 127.75 million, while monitors slipped by 0.6% to and 179.46 million units. Since 2005, it was the first time monitor panels witnessed a negative annual growth among the three main applications. Coupled by the slowing growth of TV and NB panels, it showed the exceptionally harsh conditions faced by panel makers in 2008.

TFT-LCD Panel Shipment in 2007 and 2008 (K units)

Looking back in 2008, downstream vendors aggressively pulled-in 1Q08 inventory, after a serious tight supply in 2007. In addition, announcements were made regarding their respective next-generation production line investments. Back then the general consensus was that 2008 would be another banner year for panel makers. But this started to change in 2Q08 when the monitor panel demand started to falter. The resulting accumulated inventory eventually led to a severe drop in panel prices. But as panel makers continued to maintain high utilization rates, a very serious glut occurred.

The panel market was subsequently pounded by the global economic slump triggered by the financial crisis that erupted in 3Q08. Despite being the traditional strong season, panel shipments slumped. This not only further worsened the already unhealthy monitor panel inventory, it also dragged down sales of the higher-priced large-sized TVs. Downstream clients were forced to significantly cut their orders, resulting in panel makers to engage in a fierce price competition. The effect on the Taiwan and China panel makers was most evident, due to a lack of a strong own-brand support. Since 4Q08, panel makers sharply reduced their output and manpower. Separately, with no evident rebound, the exceptional strong netbook sales made them a rising star. Although the low-priced NBs helped stimulate a new sales momentum, the overall NB sales was still showed a weakening trend. By the end of 2008, there were also signs of a built-up in inventory.

Looking forward to 2009, the challenging year in the history of the TFT-LCD industry, panel makers have trimmed their utilization rates, capex and relevant personnel. In addition, they have also conducted a complete review of their business operations. As the panel order visibility remains low in 2009, the most important thing to do now is securing more stable orders from major clients. In addition, they should stop abiding by their conventional management styles and focus on finding new product applications, clients and market segments in countering the slowdown. Examples include further development of moni-TVs, low price and customized display products or tailoring to the needs of new emerging markets. Moreover, a basic production flexibility should be maintained in order to be able to take rush orders. Finally, staying informed of the latest panel price trend, downstream vendors’ inventory pull-in and relevant global economic indicators are vital too. Such factors will help shed light on when a rebound will be seen.

About WitsView

Founded in the year 2004, WitsView, a subsidiary brand of DRAMeXchange, is composed of a team of TFT-LCD industry experts. The research field covers the development and market trend of upstream components, mid stream panels and downstream system integrators and retailers.
For more about WitsView, please visit www.witsview.com