In 2011 the display sector has had a tough go of it with TV sale softness due to economic uncertainties, inventory backups and a relative lull in new technologies (other than 3D which was not as embraced as anticipated) to stimulate a recalcitrant market. This year has seen some welcomed changes due to new market strategies, technologies and the expansion into newer verticals.
Good news for the TV panel sector, but that is not the end of the present optimism for the display sector, there is increasing demand for small- to mid-sized displays with sophisticated features (e.g., touch-screen, low power consumption, glare reduction, LED and OLED, etc.). Tablet PCs are certainly at the core of recent growth opportunities, including for panel manufacturers, as cited in this DisplaySearch report, "Shipments of tablet PCs are expected to grow from 81.6 million units in 2011 to 424.9 million units by 2017, according to the latest NPD DisplaySearch Tablet Quarterly report. The forecast for 2013 shipments has increased from 168.9 million to 184.2 million."
Not only are the hot sales for tablet PCs, Ultrabooks, and smartphones boosting panel sales, the latest boost is from the automotive sector (see Smith's upcoming report on automotive semi growth in the forthcoming MarketWatch Quarterly, free subscription). According to this DisplaySearch report, "As flat panel displays become more prevalent in applications such as navigation, multi-functional in-console monitors, and rear seat entertainment, NPD DisplaySearch expects shipments for the automotive segment to grow by nearly 50%, from 42 million units in 2011 to 62 million in 2015."
The most recent example of new semiconductor and display technology featured in the auto sector comes from this week's announcement of the new Tesla Model S electric sedan, now available for reservation purchase. While the Tesla Model S is important news for the electric vehicle (EV) industry, hand-in-hand is the continued positive growth for the necessary electronics components supporting the latest EVs. The Tesla Model S showcases the latest in automotive semi and auto display technology, as detailed in this release from Evertiq:
Based on the same Tegra processor used in smartphones and tablets, the Tegra VCM will power the vechicles 17-inch touchscreen infotainment and navigation system as well as its all-digital instrument cluster.
The Tegra VCM features a mobile superchip, which integrates a multicore ARM CPU, an ultra-low-power Nvidia GeForce GPU and dedicated audio, video and image processors. One Tegra VCM will power the Model S infotainment system, a second Tegra module will drive the all-digital instrument cluster.
TV panel update
There is still significant room for the TV panel industry to grow, with CRT replacement as well as the first round of wide-spread flat panel replacements on the horizon, particularly for emerging markets where replacement cycles are tracking at roughly a 30% faster rate than the mature economies (see this recent summary report by DisplaySearch). That being said, the TV market is still a tough challenge for panel makers and in response shipments have been slowing down by 8% for 1Q12 year-over-year (YoY), citing DisplaySearch's recent global LCD TV report. Another supply-side strategy helping the sector is the abatement of the destructive price competition by OEMs that significantly squeezed margins along the entire TV supply chain.
On the demand side, there has been some strengthening due to new size offerings and more sophisticated feature offerings in flat-panel TVs, as noted in this iSuppli report:
High-end television features like Internet connectivity and light-emitting diode (LED) backlight technology have helped U.S. flat-panel TV prices climb 11.4 percent since December 2011. And in April, average pricing for U.S. flat-panel televisions including liquid crystal display (LCD) and plasma sets reached $1,248 […]
"Feature-rich TV models are responsible for the ongoing surge in prices, especially as consumers clamor for capabilities such as Internet connectivity and LED-backlighting technology," said Tom Morrod, head of television technology for IHS. "TV manufacturers and retailers are charging a premium for these features, boosting their pricing and protecting their revenue. This represents a shift in strategy among brands and retailers to hold the line on pricing and encourage consumers to buy more expensive sets."
In short, while the display sector certainly saw its set of travails last year, thus far 2012 is proving to hold considerable opportunity. The staple sectors of TV and PC have seen a resumption in growth, although PC through new tablet PC demand as well as the positive forecasts pinned on increased sales from Ultrabooks and falling smartphone prices. Simultaneously, the growth from significant increases in automotive penetration being experienced along the entire semiconductor and electronics supply chain is also driving growth for the display sector, which provides the primary interface for the driver and passenger with the latest automotive infotainment feature sets.