China Continues to Boost Small/Medium Display Market
Strong mobile-handset sales in China over the last few months have boosted demand for small- and medium-sized LCD displays, helping to ease the price erosion spurred by the current economic recession—and even leading to increases for some products, according to iSuppli Corp.
For example, 2.0-inch 240 by 320 LCD panels experienced a 1 percent price increase in May. Prices for 3.2-inch and 3.5-inch 320 by 480 panels are set to rise by 1 percent in the second quarter, compared to 5 percent and 7 percent declines, respectively, in the first quarter.
Taiwanese LCD panel makers such as AU Optronics Corp., Chunghwa Picture Tubes Ltd. and Giantplus Technology Co. Ltd. have continued to perform strongly in China’s handset market, shipping more than 5 million units during the first month of the second quarter. Most Taiwanese companies achieved more than 50 percent of their total second-quarter 2008 small/medium display shipments in April 2009 alone. Although China’s demand in May slowed from its peak in March, the nation’s demand continues to be robust, helping to boost pricing.
This indicates there will be stronger demand in the third quarter than expected at the beginning of the year, traditionally a strong period for the market, with the clone mobile display business reporting stable to slight price increases. However, it’s unlikely that the market will see the same levels of shipment as were witnessed in the third quarter of 2008.
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The global smart-phone market continues to enjoy robust demand despite the tough economic conditions, spurring demand and stable to slightly rising prices for some high-end panels. Low-Temperature Polysilicon (LTPS) Liquid Crystal Display (LCD) panels—a popular choice for high-end smart phones including Palm’s new Pre— continue to be in strong demand. However, supply of these panels may become constrained as demand picks up and with some Japanese companies deciding to close older-generation LTPS LCD fabs. Driver IC shortages also are being reported, limiting handset production.
Furthermore, many display suppliers, especially in Taiwan, are likely to become more competitive on pricing— not only to win new projects but also to increase their market share and penetration among the major handset vendors, specifically for smart-phone products. Using fully depreciated fabs, suppliers for mobile-handset displays are able to reduce the cost of panel production.
Because of the surge in smart phones sales and continued strong demand in China, and the fact that most suppliers had cut capacity utilization rates at their fabs, prices for small/medium LCD panels for mobile phones are steady and increasing slightly in some cases. In the long run and for Tier-1 customers, however, companies will continue to strive to gain market share by cutting prices.
For example, 2.0-inch 240 by 320 LCD panels experienced a 1 percent price increase in May. Prices for 3.2-inch and 3.5-inch 320 by 480 panels are set to rise by 1 percent in the second quarter, compared to 5 percent and 7 percent declines, respectively, in the first quarter.
Taiwanese LCD panel makers such as AU Optronics Corp., Chunghwa Picture Tubes Ltd. and Giantplus Technology Co. Ltd. have continued to perform strongly in China’s handset market, shipping more than 5 million units during the first month of the second quarter. Most Taiwanese companies achieved more than 50 percent of their total second-quarter 2008 small/medium display shipments in April 2009 alone. Although China’s demand in May slowed from its peak in March, the nation’s demand continues to be robust, helping to boost pricing.
This indicates there will be stronger demand in the third quarter than expected at the beginning of the year, traditionally a strong period for the market, with the clone mobile display business reporting stable to slight price increases. However, it’s unlikely that the market will see the same levels of shipment as were witnessed in the third quarter of 2008.
Get Smart
The global smart-phone market continues to enjoy robust demand despite the tough economic conditions, spurring demand and stable to slightly rising prices for some high-end panels. Low-Temperature Polysilicon (LTPS) Liquid Crystal Display (LCD) panels—a popular choice for high-end smart phones including Palm’s new Pre— continue to be in strong demand. However, supply of these panels may become constrained as demand picks up and with some Japanese companies deciding to close older-generation LTPS LCD fabs. Driver IC shortages also are being reported, limiting handset production.
Furthermore, many display suppliers, especially in Taiwan, are likely to become more competitive on pricing— not only to win new projects but also to increase their market share and penetration among the major handset vendors, specifically for smart-phone products. Using fully depreciated fabs, suppliers for mobile-handset displays are able to reduce the cost of panel production.
Because of the surge in smart phones sales and continued strong demand in China, and the fact that most suppliers had cut capacity utilization rates at their fabs, prices for small/medium LCD panels for mobile phones are steady and increasing slightly in some cases. In the long run and for Tier-1 customers, however, companies will continue to strive to gain market share by cutting prices.
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