Global LCD TV shipments in 2014 are expected to reach 2108 million, up 32% year-on-year, according to WitsView, a subsidiary of Taiwan-based market intelligence firm TrendForce Vendors’ inventories are currently healthy and Chinese vendors in particular are looking to expand their shipments in markets abroad by bumping up competition during Black Friday in the USA LCD TV demand in China is also increasing in preparation for the October 1 holiday period, which means that oversupply is unlikely to occur in the short term WitsView Research Director Burrell Liu noted, “TV panel pricing is expected to remain flat or increase throughout August into September but this is still yet to be fully determined, as end sales performance and whether vendors’ inventories are piling up will still all make a difference The same will apply to notebook and monitor panels”
Monitor and notebook panels are expected to remain in tight supply as makers are preparing for the busy season in the LCD TV industry Additionally, demand for monitor and notebook PC bundles increased as vendors pushed such packages due to discontinuation of Windows XP, which holds a 25-30% proportion globally and 50% in China Microsoft is also offering AIO deals as well as low-priced notebook subsidies, added Liu
In June, inventories for the top six LCD TV vendors in China reached 52 weeks while Samsung Electronics, LG Electronics and Sony have panel inventories for about 35 weeks, showing there is still room for vendors to have backup panel supply In terms of Ultra HD (4K) panels, they are now priced only 12-135 times more than Full HD panels, which may drop even further and prompt more sales in end markets WitsView said it believes the penetration rate for 4K TVs will reach 55-6% in 2014
Pricing for monitor and notebook panels in July 2014
Prices of LCD TV panels for 32 to 42 inches and semi-finished products will raise US$ 1 in July, while panels sized 46-, 48- and 50-inch will raise US$ 1-2 55-inch panel pricing is expected to remain flat Moreover, pricing for monitor panels sized 185W and 27W inches will remain flat while 19W and 195W inch units are expected to increase US$ 1-15 20W panel pricing is expected to increase US$ 02-03 due to orders for 195W panels shifting to 20W units and becuase orders from vendors in the USA and Europe are increasing Panels sized 215W, 23W, 236W and 24W inches are expected to increase US$ 05-1 In terms of notebook panels, 156-inch Wedge and Flat panels are expected to increase US$1-13 while 14-inch units are expected to increase US$04-06, and for 116-, 133- and 173-inch units are remaining flat
Table 1: Panel pricing predictions for July, 2014
Source: WitsView
NAND Flash manufacturers have recently bumped up efforts to maximize profits by adjusting production capacity and have decreased supplies to channel distributors in order to fulfill demand from system OEM customers This has led to increased contract prices for NAND Flash chips by roughly 2-5% in the second half of June The prices are expected to continue increasing into the third quarter of this year and there is expected to be a slight supply imbalance as OEM and module customer demand simultaneously increase while NAND Flash shipments are expected to only slightly grow, according to Sean Yang, the Assistant Vice President at DRAMeXchange, a subsidiary of TrendForce
OEM system product prices meanwhile are being upheld due to the increased demand for eMMC and eMCP technology following the smartphone vendors’ increased preparation for the peak quarters The upcoming arrival of Apple’s new iPhone in the late third quarter and China’s increased 4G development are both anticipated to lead to a potential 10% growth in smartphone shipments and enable the eMMC/eMCP shipment momentum to continue
DRAMeXchange added that Enterprise-SSD supply may face shortages as demand for server and cloud computing equipment and high-capacity enterprise SSDs increase in the second half of the year The factors, coupled with the soon to peak shipments for mobile devices, have led to NAND Flash providers allocating capacity to OEM system products, showing that the makers are contracting their supply to module customers As a result of the shrinking shipments, the NAND Flash price growth in the channel market has become more apparent
The Japanese Ministry of Economy, Trade, and Industry (METI) announced on June 17th the withdrawal of FIT certifications for 144 solar plant facilities with capacities totaling 290MW While there are 288 approved PV projects totaled at 1950MW that have yet to enter the construction phase, METI has the right to revoke these projects’ FIT certifications if they do not start construction by the end of August, according to analysis from EnergyTrend, a subsidiary of Taiwan-based market intelligence firm TrendForce
“Pressured by the administrative procedures mentioned above, Japanese PV developers have focused on searching for investment partners lately,” said Arthur Hsu, research manager of EnergyTrend
Recently, Japanese PV developers have aggressively looked for investment partnership or opportunities to sell relevant certifications mainly because some of them have run into financial difficulties to complete required administrative procedures before required due dates “The FIT price for these cases is usually JPY 36/kWh In contrast to other markets, return rates for Japanese power plants are relatively high Moreover, Japan’s stable political and economical environment allows the nation to become the top one global investment region within the power plant market, attracting investors from China, Taiwan, Europe, and USA,” added Hsu
On the other hand, although Japan has better return rates, there are many details that need to be paid attention to when it comes to actual practices The most common problem is the discordance between the actual subsidy received and the amount being made during the assessment According to METI’s regulations, apart from getting FIT certification from the government, PV developers will also have to sign electricity sales agreement with power companies in order to complete the entire PPA process Once the PPA process is completed, final FIT prices will be finalized This has become a common investment dispute since investors tend to neglect double check this part, which led to return rates that did not meet their expectations, added EnergyTrend
This Week’s Price Quotes
Pressured by decreased demand and excess inventory, manufacturers continued to lower price quotes for certain clients Multi-si wafer prices dropped 041% to US$ 0976/piece Mono-si wafer prices also declined 017% to US$ 1192/piece Due to uncertainties prompted from the US-China trade war and weak demand in Europe, cell prices came to US$ 0361/watt, down 028% Overall module prices further lowered because second-tier Chinese manufacturers’ quotations decreased again This week’s module prices declined 102% to US$ 0582/watt, noted EnergyTrend
Global tablet shipments are expected to reach 2055 million in 2014, less than 5% on year, according to WitsView, a research division of TrendForce The tablet market is sandwiched between internal and external threats that are affecting market performance Internally, tablets have lost their novelty to attract consumers, and cutthroat price competitions are creating a desperate atmosphere in the market External factors at work, though, include competition from phablets and low-priced notebooks that are further dividing tablet market shares
WitsView Research Manager Eric Chiou noted, “Leading vendor Apple tablet shipments have remained low in 2Q14, with shipments estimated to only have reached 13 million Although, the company will be releasing new models in 2H14, it will have limited impact Moreover, iPad might experience its first decline since entering the market in 2010, with volume expected to drop from 743 million in 2013 to 684 million in 2014 The decline will mainly come as Apple is unlikely to hold any major promotional or sales events”
Second largest tablet vendor Samsung Electronics meanwhile is making great efforts to meet tablet shipment quotas, but growth has not met expectations with only 14% growth on year to 48 million in 2014 because of poor performance in both entry and high-end markets The limited increase comes as the company’s GalaxyTabPro has seen less-than-expected sales due to high costs and because there are many other tablet vendors offering tablet products with similar specifications in comparison with the company’s GalaaxyTabLite productThe company’s overall tablet shipments are expected to reach 48 million in 2014 as a result
Additionally, Amazon and Google typically release high Cost/Performance ratio (C/P) products in the third quarter of each year but are expected to cool off in 2014 PC vendors such as Asus meanwhile are cooperating with partners like Intel in order to drive down costs The end result is an expected increase in orders
White-box tablets are also in the doldrums in emerging economies Chiou added, “Due to 4G developments in China as well as lacking interest for simply Wi-Fi units means white-box shipments will take a hit Wearable devices are also emerging, which will result in flat shipment growth for white-box units this year”
Table 1: Shipments and Market Share of Brands
On May 29, 2014, Seagate Technology (Seagate) announced it acquired LSI’s Accelerated Solution Division (ASD) and FCD (Flash Components Division) assets from Avago Technology (Avago) for US $450 million Originally, FCD was responsible for LSI’s SSD controller R&D division, and formerly a SandForce research team The division’s main clients include suppliers in enterprise SSD, PC OEM SSD and retail SSD “Despite major restructuring in the SSD controller industry, US chip manufacturer Marvell will keep top position in the short to medium terms, whereas Taiwanese SSD controller manufacturers will show increased momentum,” said Alan Chen, Senior Manager, DRAMeXchange He forecasted impact from the industry restructure as following:
1 Enterprise SSD market: In-house Controller IC solution adoption becomes trend
Enterprise SSD market demand has been on the rise over recent years due to growth in mobile devices and cloud computing Because Enterprise SSD customers have very high requirements for storage device performance, data encryption and preservation, as well as customized specifications, manufacturers are merging or making purchases of other companies to increase their competitiveness in addition to strengthening controller chip and Firmware capabilities Seagate’s purchase of Avago’s ASD and FCD departments is to strengthen its server storage product competitiveness, and therefore is likely to put less emphasis on the PC OEM and Retail SSD markets in the future The largest SSD Enterprise manufacturers as of now are Intel and Samsung, which mainly use in-house control chip solutions to meet high customization demand from clients Thus, Chen believes that in the future Enterprise SSD providers will mainly use in-house controller chips and that Seagate’s Avago purchase will have limited impact on the Enterprise SSD controller chip market
2 The PC OEM SSD Market: Marvell to Maintain Strong Leading Position
At present the main providers of PC OEM SSD products are Samsung, Sandisk, Intel, Toshiba, Liteon IT, Micron and SK Hynix, which hold over a 90% market share In terms of controller chip solution strategies, Samsung completely uses in-house chips while Sandisk, Intel, Toshiba, and SK Hynix outsource orders in combination with in-house made products Micron and Liteon IT outsource all of their chip orders LSI and Marvell hold over a 90% share for receiving outsourced orders, hence following Seagate’s purchase of FCD, manufacturers began cooperating with Marvell in order to avoid purchasing controller chips from Seagate as well as lower operation risk Marvell is also the only manufacturer that has PCle controller chip mass-production experience With Apple already using PCIe in its notebook applications, other vendors are expected to begin upgrading their SSD interface specifications from SATA III to PCle Therefore, Marvell is expected to maintain a strong leading position in the market in the short to medium terms, according to Chen
Diagram 1: 2010-2017 PC SSD specifications development forecast
Source: DRAMeXchange, June, 2014
3 Retail SSD Market: Taiwan Makers to Play a Major Role
Retail SSD is also another market for Avago FCD, which currently holds over an 80% share, and module customers are heavily seeking out the company’s controller chip solutions The share is expected to be further divided among Jmicron, Phison and SMI, whose SATA III controllers, according to Chen, are already good enough to compete against Avago FCD’s products in the retail SSD market Many of the industry's module suppliers have already been known to use the Taiwanese manufacturers’ cost effective solutions before the acquisition of Avago’s ASD and FCD departments took place With the number of module clients anticipated to surge as a result of Seagate’s acquisitions, the Taiwanese makers have a good chance of seeing further shipment growth in the future
