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LCD Tablet Panels Ship Lower in May as Industry Catches Its Breath

31 July 2013

Tablet panel shipments fell in May as tablet brands paused to take stock of existing inventory and as a period of evaluation set in before the arrival of the busiest time of the year, according to an "LCD Industry Tracker - Tablet" report from information and analytics provider IHS.

Global shipments of liquid-crystal display (LCD) tablet panels amounted to 18.7 million pieces in May, down 13 percent from April. The May level is the second-lowest monthly figure so far this year after February, but shipments were expected to show as having ramped up in June when final figures are released.

Tablet panel production is moving from a low time in the year into the industry's peak season during the third quarter, when much stronger demand is expected to manifest from brands for new-tablet panels. And despite the monthly dip in shipments, the May figure this year is up a sizable 66 percent from the same time in 2012-irrefutable confirmation of a growing market for tablet devices.

Still, the mass-production of panels for new tablets in 2013 is expected to come later than usual, unlike last year when new-tablet panels started being made in the second quarter. This year, new-tablet production is encountering technological challenges arising from more powerful tablet specs, including high resolution, lower power consumption and slim bezels.

Among buyers, a bump in panel purchases by some brands was offset by little new growth or even cutbacks for others.

Industry kingpin Apple, for instance, had its second-lowest tablet procurement level for the year in May as its panel purchase amounted to 5.5 million pieces, down from 6.5 million in April. In particular, Apple drastically slashed its orders from Taiwanese maker AUO for the 7.9-inch iPad mini to just 400,000 pieces. And while Apple's panel purchasing remained steady from suppliers like South Korea's LG Display and Samsung Display, there is growing concern in the industry about Apple's order levels. Apple may be having inventory problems in panels or finished goods, some quarters suggest, in light of slowing sales of the iPad, but defenders also opine that Apple may simply be reducing its current panel buys to make way for a new-or even larger- iPad tablet later this year.

Meanwhile, chief Apple rival Samsung had flat orders for the 7.0-inch and 10.1-inch, but the electronics titan increased its orders for the 8.0-inch.

Shipments of 8.0-inch tablets, in fact, continued to grow in May, with the panel size now making up 13 percent of the market. Both Samsung and Acer were launching new 8.0-inch tablets in June, and Lenovo and Asus were also reportedly planning to introduce their own 8.0-inch tablet models in the third quarter. The biggest share of market remained the 7.0-inch, however, at 36 percent-thanks to continued strong demand from white-box tablet makers in China.

For their part, white-box manufacturers were being more cautious in May on panel purchasing after frenetic activity earlier in the year. High interest rates, rising inventory and a growing incidence of bad debts and bankruptcies all combined to slow purchasing momentum for this increasingly important group of buyers.

Among panel makers, Samsung Display was the top manufacturer in May with a 26 percent share in panel shipments to buyers, followed by archrival LG Display in second place with 21 percent. Taiwanese makers AUO and Innolux both saw shipments fall for the month, but CPT returned to normal shipment levels after clearing its panel inventory in April.

A key customer of LG Display that saw a return to action was Amazon, which announced it was entering the China market with its Kindle product. Amazon ordered 472,000 panels in the 7.0-inch size from LG Display, up from 359,000 pieces in April. Amazon also upped its panel orders for the 8.9-inch display to 243,000 pieces, compared to zero in April.

Read more >> Brands to Favor New Panels in Third Quarter

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