TFT LCD Panel Makers to Reduce Glass Input by 14% in Q3’11
Falling Panel Prices and Dimming Demand Outlook Causing Panel Makers to Control Production
Sort Date: 09082011
SANTA CLARA, Calif., September 8, 2011—Falling prices and weak demand expectations for large-area TFT LCD panels have caused panel makers to adjust their 2H’11 production strategies. As panel prices approach cash cost, panel makers are reducing capacity utilization. According to the Quarterly Large-Area Production Strategy Report, global TFT LCD glass input peaked in Q2’11 at a record 14.2 million square meters per month. However, global glass input will be reduced to 12.2 million square meters per month in Q3’11, a 14% drop Q/Q, and 5% growth Y/Y. As the market outlook is still unclear, panel makers are planning to maintain input at 12 million square meters per month in Q4’11.
Table 1: Global TFT LCD Glass Input (Million m²/Month)
|
Application |
Q3’10 |
Q2’11 |
Q3’11 |
Q/Q |
Y/Y |
|
Monitor |
2.4 |
3.1 |
2.5 |
-19% |
4% |
|
TV |
7.3 |
8.6 |
7.5 |
-13% |
3% |
|
Notebook PC |
1.1 |
1.4 |
1.2 |
-17% |
8% |
|
Others |
0.1 |
0.1 |
0.1 |
|
|
|
Small/Medium |
0.5 |
0.7 |
0.6 |
-7% |
16% |
|
Tablet/Mini-Note |
0.2 |
0.3 |
0.3 |
|
79% |
|
Total |
11.6 |
14.3 |
12.2 |
-14% |
5% |
Source: Quarterly Large-Area Production Strategy Report
Glass input area for all three of the major applications for large-area TFT LCD—desktop monitor, TV and notebook PC—fell by double digits, with 19%, 13% and 17% declines Q/Q, respectively, resulting from the current low panel prices and an unclear outlook on market demand. Panel makers intend to decrease mini-note PC production while increasing tablet PC panel production, so this category is flat Q/Q.
According to Shawn Lee, Senior Analyst for DisplaySearch, “We have seen very different results this quarter. While panel makers planned to raise utilization rates to 85-90% in Q3’11, they are now projecting only 75%.” Lee added, “In the past, there was always a gap between planned glass input for TV applications and planned TV panel shipments, since panel makers wanted to keep a surplus to meet any sudden demand, but our latest check indicates that the total 2H’11 TV glass input area is very close to the planned area of TV panel shipments. This is an indication of how conservative panel makers are about the TV market.” Lee also noted “As panel prices approach cash cost and panel makers reduce panel inputs, short-term tightness cannot be ruled out, as some brands have promotions planned for the coming holiday season. We may see spot deals and short-term increases in glass inputs in Q3 and Q4.”
All manufacturing generations are falling by double digits in Q3’11 except Gen 10, which had a relatively low utilization rate in Q2’11 due to the earthquake in Japan, and is now focusing on production of large TV panels.
Table 2: Global TFT LCD Glass Input by Gen5+ Generations (Million m²/Month)
|
Generation Fab |
Q3’10 |
Q2’11 |
Q3’11 |
Q/Q |
Y/Y |
|
Gen 5 |
2.3 |
2.7 |
2.1 |
-21% |
-6% |
|
Gen 5.5 |
0.2 |
0.4 |
0.3 |
-28% |
16% |
|
Gen 6 |
2.5 |
2.9 |
2.4 |
-15% |
-2% |
|
Gen 7 |
2.6 |
3.2 |
2.9 |
-12% |
8% |
|
Gen 8 |
3.0 |
4.3 |
3.5 |
-19% |
17% |
|
Gen 10 |
0.4 |
0.3 |
0.6 |
120% |
29% |
Source: Quarterly Large-Area Production Strategy Report
The DisplaySearch Quarterly Large-Area Production Strategy Report offers the industry’s most complete view of large-area panel production by analyzing panel makers’ quarterly production plans. Subscribers receive production plans by application in different generation fabs with granular detail down to the size by aspect ratio and by country. With 100% coverage of panel makers, the Quarterly Large-Area Production Strategy Report provides reliable information and insight needed to evaluate production strategies, understand current capacity, spot key supply trends and manage inventory. Please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail contact@displaysearch.com or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan for more information.
About DisplaySearch
Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the display supply chain, as well as the emerging photovoltaic/solar cell industries. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with The NPD Group, its parent company, DisplaySearch uniquely offers a true end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on DisplaySearch analysts, reports and industry events, visit us at http://www.displaysearch.com/. Read our blog at http://www.displaysearchblog.com/ and follow us on Twitter at @DisplaySearch.
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