Q2’14 large-area (9”+) TFT LCD panel shipments reached 181M units, the second-highest ever, and LCD TV panel shipments, at 64M, reached a record high, according to the Quarterly Large-Area TFT Panel Shipment Report. Despite the high level of shipments, there have been some shortages of TFT LCD panels, leading to increases in panel prices. During this year, we have been analyzing the reasons for the tight supply; here is a summary.
- Despite high LCD TV panel shipments in 2013, LCD TV panel supply has been tight in 2014 due to new products and technologies, as well as changes in the supply chain and end markets. In Q1, the tight supply started to impact panel prices. The trends have continued, most notably the shift to larger sizes, aggressive positioning for year-end sales, as well as realignments in the value chain.
- Meanwhile, notebook PC and monitor panel shipments declined sharply in 2013, and panel makers had conservative production plans for 2014. Demand has not been as soft as expected, however, as low-priced ($249) models including Chromebooks have increased interest, while LCD monitor demand has been better than expected due in part to the end of support for Windows XP. At the same time, panel makers have been reluctant to increase production of PC panels due to their low profit margins, so some PC brands have had some difficulty gaining supply.
- While demand for tablet PCs has started to soften, the smartphone market continues to grow, shifting to larger panel sizes and resolutions. This, along with growing demand from automotive and commercial markets, has contributed to the tight supply in 2014.
While there are concerns about over-shipment in Q2’14 leading to inventory adjustments from the downstream in 2H, large-area panel shipments actually fell 7% M/M in July. This could be an indication that panel shipments in 2H will slow down as panel makers become more cautious.
| June’2014 | July’2014 | M/M | |
| 9”+Tablet PC | 8.3 | 5.9 | -29% |
| Notebook | 17.3 | 16.0 | -8% |
| LCD Monitor | 13.3 | 12.8 | -4% |
| LCD TV | 21.3 | 21.0 | -1% |
| Others | 1.6 | 2.0 | 25% |
| Total | 61.8 | 57.7 | -7% |
Source: Monthly TFT LCD Shipment Database
The declines in 9”+ tablet PC and the notebook PC panels were due to inventory control by PC brands, particularly by tablet PC brands facing maturity and a crowded market. Shipments of tablet PC panels of all sizes were 25M in July, a 17% M/M decline from 30M in June, and the lowest since August, 2013.
Supply of monitor and TV panels is tight in sizes such as 19.5”, 21.5”, 23.6”, 32”, 39.5”, and 40”. The monitor market is relatively stable, but some brands are reducing purchases in order to control panel inventories. In LCD TV, leading setmakers Samsung VD and LG Electronics are starting to slow down panel purchases, but European, Chinese, and American brands are still increasing panel allocation. The trend toward large sizes continues to be remarkable, with 50” and above panel shipments of 3.5M in May, 3.8M in June and 4.0M in July.
Meanwhile, 4K LCD TV panel shipments reached a new high of 1.74M in July, 13% M/M growth and 8% penetration. In addition, panel makers are adopting wide color gamut in 4K panels, continuing the upgrading of panel features as well as supporting prices. Innolux continues to lead 4K with 36% of all shipments, followed by LG Display (23%), Samsung Display (21%), and AUO (11%). Chinese panel makers are gradually acquiring the capability for 4K panel production, increasing their share from 5% in June to 7% in July.
