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In First for Industry, LCD TV Panel Shipments Dip in Q3

07 October 2013

For the first time ever, the global market for liquid-crystal display television (LCD TV) panels will decline in the third quarter compared to the second, a worrisome development during what is a normally strong time of the year for sales, according to a new LCD market tracker report from IHS Inc., a leading global source of critical information and insight.

Worldwide LCD TV panel shipments during the third quarter are expected to amount to 58.0 million units, down from 58.8 million during the second quarter, as presented in the figure. Last year, third-quarter shipments amounted to 60.0 million, up markedly from 54.5 million in the earlier quarter.

Final figures for the third quarter will show that LCD TV panel shipments went through a soft period. The downshifting of the market comes as a surprise because the third quarter is usually a time when things start heating up, in preparation for the furious upcoming fourth-quarter selling season.

Consumers, however, have not been buying as many new television sets as originally hoped, leaving TV brands with panels that they haven’t been able to move. The stockpiles held by brands have been aggravated in particular by the large panel shipments made to them by LCD TV panel makers during the first half of the year.

The weak third-quarter numbers will be especially hard on panel makers that serve Chinese TV brands. TV sales in China have been on the decline since the end of the second quarter, and sales are not expected to improve much despite the upcoming China National Day in October. Among the panel makers affected more by this turn of events are Innolux and AUO of Taiwan, both of which suffered a fourth month of decline in shipments during July.

Meanwhile, some other panel makers are having a better time. One Chinese-based maker, CSOT, is maintaining healthy inventory even though it has the highest portion of Chinese customers for TV panel shipments, thanks to an expansion in its client base that includes, the largest TV brand in sales, Samsung from South Korea.

Overall, panel suppliers whose main customers are outside of China will also enjoy relatively better prospects than panel makers whose main clientele are the Chinese. For instance, makers like Samsung Display and Japan’s Sharp, with the lowest percentage of Chinese TV brands as customers, will see their share of the LCD TV panel market enlarge in the third quarter.

Panel makers kept overall fab utilization rates at 83 to 84 percent in the third quarter, not too far off from the 80 to 83 percent level seen in the second quarter. Utilization rates, however, are not likely to increase moving forward because of uncertainty in the fourth quarter, coupled with continuing weak demand from the market.

Among panel makers, Beijing-based BOE was the one to have increased shipments in July. Top-tier brands like Samsung and LG were among the panel buyers that increased their purchasing volume from BOE during the month.

Read more >> Q3 TV panel demand to lag behind Q2



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