TrendForce: May large-sized panel shipment surged 4% MoM on inventory replenishment and new model shipment

According to the latest shipment report of WitsView, the display research division of the global intelligence provider TrendForce, the large-sized panel shipment in May 2013 reached 67.65 million units, surging 4% MoM.   
   
As China’s subsidy policy ended, panel makers lowered prices in May to stuff shipments of specific sizes to certain clients to maintain the high utilization, especially the 32”. The LCD TV panel shipment increased 4.8% MoM in May to 20.35 million units, and the monitor panel shipment surged 5.3% to 14.58 million units as downstream brands’ orders heated up. The 10.1” and above NB panel shipment attained 16.83 million units, growing 20% MoM, as brands lifted demands in response to the H2’13 new model launches. For the tablet panels, the shipment dropped to 15.88 million units, trimming 11% MoM, as the 7.9” panel shipment continuously declined and the demand in the white-box market eased. 
   
WitsView’s research manager Jeffy Chen said that the sales during China’s May 1st holidays grew 18.1% from the same period last year, and the ending subsidy policy stirred consumption significantly, indicating the demand for LCD TVs has been brought out in advance and the risk China’s H2’13 LCD TV panel demand softens surges largely. However, panel makers were encouraged by the evidently improving profits in Q1 and had to maintain the utilization elevated to lower costs and further drive up profitability. In addition, the continuously improving material costs and largely dropping yen would expectedly contribute to panel makers’ profitability, implying the demand turns soft and panel makers’ ability to endure panel price drops strengthens largely.

Chinese brands will slightly adjust panel procurement before the Oct. 1st Golden Week, driving down the panel shipments in June and July. Panel makers start to lower prices to secure shipment to ensure orders, significantly depressing panel prices and reflecting the demand in the second half of the year in advance. Besides, the economic indicators show the sluggish 2013 economic outlook in main markets globally, and the excessively aggressive production strategy delays quarter by quarter the digestion of the inventory accumulated in the previous periods and postpones the demand-and-supply balance in the second half of this year.  
 
Based on WitsView’s forecast, the June large-sized panel shipment grows 2-3% from May. The TV panel shipment drops 3-4% MoM, while the demand for the 7” and below tablets and smart phones heats up and constrains some IT panel capacities, especially the monitor panel is deeply impacted, declining 3-4% MoM. The NB panel shipment continues to surge 3%, and the demand for tablet panels grows more than 10% from May as all brands’ demands for panels increase.

Chart 1: TFT-LCD Panel Shipment in May-13 (K units)

Source:WitsView