Prices of Low-End Smartphone Panels Hit New Historical Highs in September as Demand Outpaces Supply, Says TrendForce

WitsView, a division of TrendForce, reports that strong demand is pushing up prices of LCD panels for smartphone displays of the lower resolution specs. With demand for high-end device models falling short of expectations, smartphone brands are now relying on low-end devices with bargain-priced panels to boost their product shipments. However, limited supply and increasing demand have caused prices of 4-inch WVGA and 4.5-inch FWVGA panels to reach new highs in September, with monthly increases at over 50%, respectively. Looking ahead, prices of lower-end smartphone panels are expected to keep rising in the fourth quarter.

WitsView’s latest analysis indicates that this year’s high-end smartphone models have not been well-received by consumers due to various reasons, such as the lack of innovations, unclear product positioning and even serious product quality issues. Adjusting to the market conditions, smartphone brands are now stepping up shipments of mid-range and low-end devices to achieve their annual shipment targets. Though lower-end smartphone panels are not actively promoted by suppliers due their weak product margins, their demand has soared recently as smartphone brands need them to sustain their overall device shipments.

Currently, Taiwan’s Hannstar and China’s Century Technology and InfoVision Optoelectronics are the remaining major suppliers of WVGA, FWVGA and other lower-resolution panels. Because of the limited supply, prices have climbed to new historical peaks this September, with 4-inch WVGA and 4.5-inch FWVGA registering massive price increases of over 50%, respectively. Likewise, prices of 5-inch FWVGA panels have remained high due to a shortage of same-size HD panels that has forced white brand clients in southern China to switch to FWVGA counterparts. Additionally, panels for feature mobile phones have also seen a price increase, with the average quote of 2.4-inch QVGA panels already rising above US$1.5 per piece this September.

Prices of HD smartphone panels will weaken once Gen-8.5 fabs in China enters production

Major Chinese panel makers BOE Technology (BOE) and CEC-Panda are gearing up their Gen-8.5 fabs to supply panels for small-size smartphone models. Though prices of 5-inch and 5.5-inch HD panels have seen increases of 30% monthly this September, the mood of the market is still quite conservative. Compared with a Gen-6 fab, which represents the mainstream manufacturing technology, a Gen-8.5 fab can cut twice as many 5-inch panels from a single piece of glass substrate. Thus, BOE and CEC-Panda’s Gen-8.5 fabs will have a huge impact on the supply-demand situation if they follow their schedules and begin mass producing HD smartphone panels next year. Given that supply will stabilize become plentiful, WitsView anticipates prices of 5-inch HD panels to swing sharply downward in the first quarter of 2017.