TrendForce：Average size of LCD TV panels would top 40” in 2013

According to WitsView, the display research division of TrendForce, the overall demand for large-sized panels in 2012 would climb by 9%-10% with tablet panels possibly reaching 135 million units, dramatically growing by more than 85%. Besides, both the LCD TV and the regular NB show higher-than-expected shipments, seeing estimated YoY growths of 7% and 8%, respectively. But when comparing them to 2.6% and 2.2%, the YoY growths of TV and NB set shipments in 2012, panels seem to be overstock. The monitor panel demand shows a YoY decline of 9%.
  
The global economy is continuously dragged by European debt crisis, with QE3 launched by the US increasing inflation risks worldwide. In addition, the high unemployment rate among young adults erodes the overall market confidence, leading to IMF slashing again the global economic growth forecast to 3.3% for this year and 3.6% for next year.
 
It is forecast the overall demand for large-sized LCD panels would continuously fluctuate near the bottom of global economy in 2013. WitsView indicates that, the supply glut of the panel market has been improving significantly amid major changes on both the demand side (panel size increase accelerates area demand) and the supply side (developments on new products and new technologies lead to capacity limitation).

Demand side: China’s energy-saving subsidy policy released in June injected a boost into the panel demand in 2H’12. The influences brought by the official policy were not only panel demand increase, but prompting Chinese brand to adjust the product lines toward large sizes and high efficiency, in order to gain high subsidies. In addition, the 60” is strongly promoted with the low price campaign in North America in Q4. The two main factors mentioned above accelerate the average size of TV panels to grow. WitsView revise up the average size of TV panels to 38.5” for 2012, which is possibly to top the benchmark of 40” in 2Q’13. The size increase means panel demand by area climbs dramatically with the growth of overall TV panel demand area reaching 11% in 2013.

Source：WitsView   
 
Supply side: in an effort to reduce losses, in 2012 panel makers propose solutions regarding to short-term, mid-term, and long-term operations. In the short-and mid-term operation, production cost improvement is regarded as priority. In addition, with the advantage maximization of all production lines and capacities, the new products (such as 19.5”, 39”, 50”, and 58”) with higher cutting efficiency would be developed to create product variety and secure stable outlets.
    
The long-term operation focuses on sustainable developments such as technical research and trial production related to new technologies such as Oxide and AMOLED. As the wide view angle technologies IPS and FFS have become mainstreams among mobile devices, certain panel makers turn active on production line transformation and patent licensing to share the market. Panel supply would see structural limitations in 2013 with the lack of added capacity, production line transformation, new technology application, and product line adjustment.

WitsView predicts that, in 2013 the LCD panel market would show a more balanced situation of supply and demand, but three potential factors may cause negative influences to the market: 1. the overstock of LCD TV and NB panels in 2012 may be the main pressure source to market inventory in 2013; 2. the sustainability of China’s subsidy measure and its budget sufficiency is in question, and the continuity of positive encouragement to the market is also doubtful; 3. Will US face fiscal cliff after the presidential election? Will the spread of European economic slowdown further drag global economic recovery?
  
WitsView indicates that, the large-sized panel demand would surge by 4%-5% YoY in 2013 to a total volume of 807 million units. Among which, tablet panel would reach a shipment growth of around 35% and hold a shipment of 182 million units. As the average size of TV panel boosts, the large-sized panel demand by area would be lifted to 137-139Mn m2,   climbing by 8%-10% from 2012.


Source：WitsView