Electronics Production | June 06, 2006
iSuppli Raises LCD-TV Panel Forecast, Predicts LCD-TV Market Leadership in 2009
In light of dramatic reductions in pricing and increased consumer acceptance, iSuppli Corp. has raised its forecast for LCD-TV panel production in 2006, and now is predicting that LCD-TVs in three years will displace CRTs as the leading type of television manufactured worldwide.
iSuppli has boosted its 2006 forecast of shipments of LCD panels used in televisions to 46.7 million units, up from its previous prediction of 41.9 million units. LCD-TV panel shipments now are forecasted to rise by 74 percent compared to 2005. "Increased production capacity from sixth- , seventh- and eighth-generation LCD fabs has led to rising availability and decreasing costs for the types of large-sized panels used in televisions," said Sweta Dash, director of LCD and projection research for iSuppli. LCD-TV panel shipments in the first quarter increased by 7 percent compared to the fourth quarter of 2005, reaching 10.6 million units, Dash noted. As a result of this, and due to demand that fell short of suppliers' expectations in the first quarter, the average price for larger LCD-TV panel sizes, i.e. 32-inch and 40/42-inch, fell by 17 percent and 14 percent respectively in May compared to January 2006. "Although LCD-TV panel demand increased in the first and second quarters due to sales related to the World Cup, shipments fell short of the expectations of some suppliers," Dash said. "Despite that, the second quarter is expected to bring continued growth for LCD-TV panel makers due to reduced prices and increased adoption among consumers. Shipments will accelerate further in the second half due to these factors." Increases in capacity and falling prices for panels are impacting the LCD-TV market itself, causing consumers increasingly to choose LCD-TVs rather than sets based on CRT and other display technologies. LCDs accounted for 17 percent of television shipments in the first quarter, up from 15 percent in the fourth quarter, according to iSuppli. With its rate of adoption accelerating, LCD will become the leading display technology for television by 2009, accounting for 48 percent of factory shipments. The CRT's share of the market will decline to 42 percent that year, marking the first time ever that CRT is not the leading technology for television display. By 2010, LCD will account for the majority of television shipments for the first time, with 56 percent of unit shipments, iSuppli predicts. The figure below and attached presents iSuppli's worldwide forecast of the percentage of television shipments broken down by display type. In terms of market share in the LCD-TV panel business, LG Philips LCD (LPL) maintained its leadership in the first quarter, with 22.3 percent of unit shipments, according to iSuppli. The company's shipments increased to 2.4 million units in the first quarter, up 6 percent from 2.2 million in the fourth quarter. Samsung, Chi Mei (CMO) and AU Optronics (AUO) in the first quarter retained their second- , third- and fourth-place rankings with market shares of 20 percent, 18.7 percent and 16.8 percent respectively. Both Samsung and CMO saw their market share decline slightly. However, AUO managed to boost its market share on a strong surge in unit shipments. The varying performances of Samsung and AUO can be attributed to the portion of the market they are choosing to serve. AUO is focused on increasing production of the popular 32-inch and 37-inch sizes, which are most efficiently made at the type of sixth-generation fab it operates. Samsung, on the other hand, has focused more of its capacity on higher-priced, lower-volume 40-inch and larger-sized TV panels, as it ramps up in its two seventh-generation fabs, one of which commenced production at the beginning of the year. South Korean-based suppliers dominated the LCD-TV panel market throughout 2005, controlling 44.8 percent of unit shipments in the fourth quarter, followed by Taiwan at 40.1 percent. While Korea was still leading in the first quarter, with a 43.3 percent share of sales, Taiwan closed the gap to just 0.6 of a percentage point. Most of Taiwan's rise can be attributed to the market-share increases posted by AUO. However, some of the increase may be due to the fact that Korea is focusing on the lower-volume 40/42-inch sizes, while Taiwan is concentrating on the higher-volume 32-inch and smaller sizes.