WitsView: Ranking Reshuffled for Small-Medium Size Panel Competition Due To Japan Display

After Sharp had remodeled its 8G production line and started up in the medium-small size panel production, Sony, Toshiba, and Hitachi launched a joint venture, Japan Display, with financial support from the Japanese government. WitsView, a research division of TrendForce, indicates that this move a limited impact from this effort on the large size panel market. It nonetheless predicts an imminent impact, which is derived from solid technological base and patents, on the volatile small and medium size panel market that is ever producing new models. Therefore, this joint venture will challenge both Korean makers, the current leader in the market, and Taiwanese makers.
 
After the mergers and restructuring, Japanese makers re-enter the panel manufacturing market by relying on both AMOLED and LTPS related technologies. According to WitsView, Samsung Mobile Display currently domintates the AMOLED, and it is not possible for this technology to be widely available in the short term without competition in the current market. In contrast, there is a growing demand on high-resolution products from small-medium size panels. The reliance on LTPS production process that could be up to 400 DPI is growing bigger than that on traditional A-Si. This shifting reliance is the key point from which Japanese makers aim at winning the panel making competition within next one or two years.

Eric Chiou, Research Director of WitsView, indicates that small-medium size panels with higher image resolution are inevitable. On the demand side, panels with higher image resolution could help to substantiate experiences of high definition mobile devices and also help to establish market penetration into e-book reader, providing entry into the education market with immense potential for growth in the long run. On the supply side, high-definition panels involve higher level of technology and investment in equipment, thus raising the entry threshold higher other than that for producing large size panels. For those panel makers with an upper hand in technology, they could outperform other competitors by producing small-medium size panels with high image resolution, and re-establish market order in the volatile panel making industry. In sum, that small-medium size panel with high definition is beneficial for both supply and demand accelerates its development trend.


 Source: WitsView

As for the tablet PCs in the current market, image resolution ranges from 130 to 170 DPI either for 9.7-inch Apple iPad with 70％ market share or other 7-inch and 10-inch products brands. iPad is likely to follow the example of iPhone, which was upgraded from 3GS to iPhone 4G with a boost to the resolution, by increasing the resolution of iPad 3 to 264 DPI. This increase will no doubt trigger the competition on panel resolution with other panel makers.
 
According to WitsView, overall tablet PCs market will still be dominated by products with 100-200 DPI resolution, with a market share of 96％. With  new products entering  the market during first half of next year, however, products with DPI resolution ranging from 200-300 are expected to grow to over 60％ in 2012, establishing their status as mainstream products. Following this trend, in 2014, tablet PC’s with 200 DPI resolution and above normal standards, accounting for 97% of the market.


 Source: WitsView

In the case of Japan Display, utilization rate is still be strengthened, despite that technology and capital are all in place. Sony, Toshiba, and Hitachi still utilize production line of 4G or older; product assortment is still limited to small size mobile phones; and the economies of scale are rather weak at this stage. However, WitsView further contends, once the joint venture succeeds in integrating utilization rate of other Japanese 6G and above production line, it will become a formidable competitor, appealing to many brands for cooperation because of its advantages of capital, technology, patents, and manufacturing process.