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Display Diversification Ensures Growth


Global LCD TV unit shipments continue to be strong, despite a 2Q10 slowdown in global LCD TVs that lead to 3Q10 pricing declines due to oversupply situations for both LCD TVs and LED-backlit LCD TVs.  However, those ASP drops look to be a catalyst for sales rebound heading into the last quarter of the year (4Q10), particularly for LED LCD TVs.  Overall, according to various analysts' reports on the LCD market, Y10 should show double-digit expansion with growth of LED backlight technology during 2011, as further explored by DisplaySearch here.


The continued growth in LED LCD TV varies significantly by region, with the emerging markets leading the growth between 30-50% levels, and accounting for just under 30% of total global demand, according to Credit Suisse (cf. 'Asia Display Tour Feedback (Sep 2010)', 9-14-10, pp. 1, 7).  The mature markets, North America and Western Europe are expanding by only 1% and 8.9%, respectively, as cited by iSuppli here.

The uptake to these data points is that analysts across the board expect display manufacturers for LCD TV panels to cut production output to better match global demand by region, size and favoring LED backlighting (cf. iSuppli's report on Chinese LCD TV demand here).  Favoring the ability of this sector to correct after excess inventory in 2Q10 and ASP dips in 3Q10, is the vigilance that retailers have maintained in inventory management.  Retailers have been diligent in keeping sell-through at good levels in spite of the economic softening.  Inventory levels remain acceptable, albeit August ended with slightly higher than expected levels.

Interestingly, as cited by Credit Suisse, "inventories for TVs [are] apparently more excessive than for PCs.  Demand for high-end TVs is particularly weak." (ibid., p. 5).  As a result, panel bookings for 4Q10 are likely to be cut rather than to be increased.  Forecasts are positive though, with healthy levels seen as returning by 2011 based on these inventory strategies, price cuts, and demand from emerging economies, which remains strong due to continued CRT replacements globally.

In sum, forecasts are generally good for panels and displays, with particular strength for small- to medium-sized TFT LCDs, particularly for notebooks, tablets and smart phones.  Corning Inc., a bell-weather for panels, recently released their guidance showing improved pricing and ramps for tablets, in particular, as reported by Citigroup (cf. 'Corning Incorporated (GLW) – Monitor & Notebook Panel Pricing Improves As Tablets Ramp, TV Panels Still Weak […]' 10-6-10). 

Visibility and market corrections for panels looks positive and set to continued more normal correlations with broader economic trends and particular growth in emerging economies.

Lisa Ann Cairns, Ph.D.
Written on Friday, 15 October 2010 09:42 by Lisa Ann Cairns, Ph.D.

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