2009 was a bumpy ride for the LCD-TV panel market, having had a good run in 2008, 1H09 profits were down, as was the case for everyone in every market. At the end of 2009, profitability was rebounding and now in 1Q10, and forecasting for the rest of the year, the LCD-TV panel market looks strong again, according to various reports over the past quarter from iSuppli,DisplaySearch and DigiTimes.
According to iSuppli, "Global revenue from shipments of large-sized LCD panels [...] is set to rise to $49.2 billion in 2010, up 40 percent from $35.2 billion in 2009."
A trend we have been watching is the precedence that manufacturers are giving to TV panels because of the increased profitability of these panels over others. As a result of the TV panels having manufacturing preference, the labor shortages ongoing (roughly 10% labor shortage in Asian manufacturing facilities persists), and the component shortages for LEDs and driver ICs, non-TV panels are experiencing shortages and extended leadtimes. For example, the CCFL notebook panels are very short for two reasons: (1) these CCFL panels are being replaced with LED models; and (2) manufacturers are not putting CCFLs, especially for notebooks, into production schedules because of the focus on TV panels first, then LED notebook panels (particularly the netbook and 15.6" panels), and finally monitor panels. It is very unlikely that we'll see room on the lines for any CCFLs.
Looking at the larger market revenue picture for panels, at the root of the 2009 revenue decline was the 32" panel's loss of profitability. The thrust for the resumed market growth is the larger TV panel sizes (that is China's preference for the 36" through 44" models presently) and the improvements in production efficiencies coupled with reduced costs thanks to upgraded production fabs.
New production fabs for TFT LCD makers are the main display news story this week: while Korea had loosened legislation for its companies to begin fabs in China, Taiwan only did so this week. Each government imposed different constraints on the builds: Korea did not regulate the generation of the fab, but did mandate the use of domestic equipment; Taiwan did not specify equipment, although did impose quotas (limit of three) and other requirements, such as the "N-1 rule: The fab generation has to be to [sic] one generation behind the highest generation in Taiwan," as reported byDisplaySearch.
These new TFT LCD fabs are being quickly bid on by the major panel makers and with Chinese demand so strong in addition to global 2010 forecast upticks, this will be a developing story to watch.