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Electronics Production | July 11, 2007

Revenue for large sized LCD to exceed $100 billion for first time in 2011

Citing rising demand, tightening supply and increasing prices, iSuppli Corp. has raised its forecast for large-sized LCD panel shipments for 2007 and the following years.
Global revenue for large-sized LCD panels, i.e. those with diagonal dimensions of 10 inches or greater, will rise to $66 billion in 2007, up 22.2 percent from $54 billion in 2006. This represents a 6 percent increase compared to iSuppli's previous forecast of $62 billion for 2007.

In 2007, worldwide shipments are forecast to reach 353.8 million units, up 25.2 percent from 282.5 million units in 2006. iSuppli previously predicted shipments of 350.1 million units for the year.

“Following weak pricing conditions in the fourth quarter of 2006 and in the first quarter of 2007, the large-sized LCD panel market entered into a robust recovery in the second quarter—and strong conditions are persisting in the third quarter," said Sweta Dash, director, LCD and projection research for iSuppli.

“Demand is rising from all three major markets for such panels: televisions, desktop monitors and notebook PCs. Meanwhile, inventories remain under control. This combination of rising demand and constrained supply is causing overall panel prices to increase. Demand for ever-larger LCD-TVs has prompted iSuppli to raise its revenue forecast by a larger margin than its unit forecast."

This strength should continue during the coming years. Dash predicted the
large-sized LCD panel market would expand to 597.6 million units by 2011, up 2 percent from iSuppli's previous forecast of 587.1 million units. Revenue will reach $102 billion in 2011, up 6 percent from iSuppli's previous forecast of $96 billion for the year. This will mark the first year the global large-sized LCD panel market exceeds $100 billion in size.

“In the coming years, unit growth will be driven by increased adoption of LCD-TVs among the world's consumers," she added “Revenue growth will arise from consumers shifting to bigger LCD-TVs, especially to 40/42-inch, and even larger sizes."

LCD-TV sales are being driven up by a combination of factors, including lower prices for finished sets, improvements in performance, global shifts to Digital Television (DTV) and the arrival of the Summer Olympics in 2008.

Although costs for some panels are increasing or stabilizing, end prices for LCD-TVs are expected to continue to decline due to intense competition at the retail level.

iSuppli has upgraded its forecast of global large-sized LCD-TV panel shipments in 2007 to 77.5 million units, a 2 percent increase from 75.6 million units previously.

“By 2008, shipments of large-sized LCD-TV panels are expected to break the 100 million threshold for the first time, reaching 101.2 million units," Dash said. “In 2009, LCDs will become the world's dominant television display technology, accounting for 52 percent of unit shipments. By 2011, LCDs are expected to take a 65 percent unit share of the worldwide television market."

iSuppli predicts LCD-TV panel shipments will rise to 180.45 million units in 2011, up 5 percent from our previous forecast of 172.2 million units.



Factors boosting the LCD-TV market include increased adoption among consumers and expected capacity increases for 7.5-, eighth-, ninth and 10th-generation LCD fabs, which can produce very large-sized television panels more cost-effectively than older facilities can.

This has caused prices for the 40-inch and larger LCD panels to decline, even as prices stabilize for 37-inch and smaller products. Because of this, the price gap has closed between 32-inch and 40/42-inch panels, which will contribute to higher consumer adoption rates of 40-inch and larger LCD TVs.

A strong recovery in the desktop PC monitor market in the second and third quarters is expected to drive sales to 163.2 million units in 2007, up 14 percent from 142.8 million in 2006. Greater adoption of wide panels and a shift to larger sizes will keep monitor shipment growth strong through 2011, iSuppli predicts.

The wide format is gaining popularity in the 17- , 19- , 20- and 22-inch markets. Specifically, wide-format shipments increased from 25 percent of total monitors shipped in the fourth quarter of 2006 to 33 percent in the first quarter of 2007. Wide format is expected to attain a 78 percent share by 2011 due to the faster price reductions and higher adoption rates.

“Lower prices, greater consumer acceptance, increasing support from operating systems, escalating adoption in the gaming market and compatibility with wide-format notebooks all will help boost shipments of wide monitors," Dash said. “Price reductions and increased adoption of wide monitors will drive demand in the future. Monitor panel sales will reach 223 million units in 2011, with LCD technology accounting for 98 percent of the worldwide monitor market by that time."

The notebook PC LCD panel market is expected to reach 99.6 million units in 2007 and 161.5 million units in 2011, driven by lower prices, the rise of wireless capabilities in portable computers and the shift to larger display sizes. Wide-format displays accounted for 87 percent of notebook shipments in the first quarter. By 2011, more than 97 percent of notebook panels will use the wide format.

Another market for large-sized LCD panels, electronic retail signage, is projected to grow from 523,000 units in 2006 to 1.1 million units in 2007, and to rise to 15.4 million units by 2011. Retail signage comprises the display and management of information in various retail and commercial environments. LCD technology has established itself as a viable alternative to plasma in the electronic signage market. Reductions in prices and increases in performance—especially for the largest LCD panels—have resulted in greater adoption of LCD technology in the electronic signage market.

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