WitsView: Five major application shipment all suffered decline in July

According to the recent survey by WitsView, a research division of TrendForce, large panel shipment in July 2011 reached 56.43 million units, which was a decrease 5.2% from June and a YoY growth of 11%.

Panel shipment for all five major applications suffered decline from June to July. There were 15.70 million units of TV panel shipment in July, a 6.3% decrease from June. IT market demand was also weak, with July’s monitor panel shipment of 14.85 million units, which was 7.9% decrease compared to June. Notebook panel shipment in July is down to 15.63 million units, a 0.5% drop from June. Tablet PC panel shipment in July also decreased to 7.09 million units, which was a 1.9% drop from June. Netbook panel shipment was 3.13 million units, suffering a 14.8% fall from June.

Chart 1: TFT-LCD Panel Shipment in Jul-11 (K units)


WitsView analyst Jian-An Chen points out the debt crisis in Europe and US since early 2011, have affected both global business and consumer markets, resulting in low consumer confidence  Consequently, market outlook remains dim despite the commencement of Q3, the traditional peak season of the industry. While panel makers have been reacting with production reduction, panel prices in July and August continue to slide. The price drop can be attributed to the remaining previous inventory and insufficient production cutback. On the other hand, brand customers have been pushing back their procurement plans to August, and this has directly affected the July shipment performance for large panel.

In terms of the Q3 shipment outlook large panel shipment, WitsView predicts a more QoQ growth of 1~3%. WitsView analyst Jian-An Chen also indicates that, looking at the Q2 to Q3 historical shipment statistics over the past six years (2006~2011), this year’s performance ranks third amongst the worse shipment numbers, only faring better than 2008 (-0.6%) and 2010 (-4.6%). Apparently, despite the bailout policies launched by all major world economies, long-term, effective solutions in response to the 2008 financial crisis. The road to global economy recovery is still very bumpy, leading to very slow progress.

The future rise of China panel makers will not only aggravate the already imbalanced panel supply-demand status, but it will also lead to a three-way battle for China domestic market between Taiwanese, Chinese and Korean panel makers. LCD panel demand in China has been stimulated once after the implementation of  “Home Appliance Subsidy” policy for rural areas. On the other hand, LCD panel penetration into Europe and the U.S. have already been reached relative peaks. For Taiwanese panel makers who do not carry their own brands as major supporting outlets, the emerging markets should be a major target with relatively high potential. In other words, it is going to be critical for Taiwanese panel makers to effectively integrate upstream and downstream resources, including such as business group or shareholders as well as to establish strategic alliances with customers through manufacturing, production, sales and also collaboration with domestic brands.