LCD Panel Makers to Increase Capital Spending in 2010
Projected $16.9 billion in capital expenditures could cause LCD panel oversupply in Q4 2010 and in 2011.
In what has become an aggressive race to build bigger and better next-generation fabs, LCD panel manufacturers are set to spend nearly $17 billion in 2010 on capacity expansions, but the move is likely to trigger an oversupply of LCD panels on the market, especially at the end of the fourth quarter of 2010 and in 2011, according to iSuppli Corp.
The LCD panel manufacturers with the projected highest capital expenditures for 2010 include the South Korean giants of LG Display, in first place with approximately $4.6 billion (5.5 trillion Korean won); and Samsung Electronics Co. Ltd., in second with $4.3 billion (5 trillion Korean won). Virtually tied in third place are Taiwan’s AU Optronics Corp. and Chimei Innolux Corp. (also known as CMI), with $3.1 billion (NT $100 billion).
For the Top 13 LCD panel makers, capital expenditures in 2010 are forecasted to reach $16.9 billion, up a hefty 43.2 percent from $11.8 billion in 2009.
The increased capital expenditures—all planned with an eye toward expanding LCD panel capacity— come in the wake of expected strong demand among consumers for larger-sized LCD-TVs and other specialized technology carried by flat-panel televisions, including 3-D and LED backlighting. Going forward, iSuppli forecasts the LCD panel market to be worth $94 billion in 2010, $105 billion in 2011 and $114 billion in 2012.
For LCD panel suppliers, a higher level of capital spending is needed in order for them to grow or maintain valuable share of market. Commanding the biggest unit share in the first quarter of the large-sized LCD panel market, at 24.9 percent, was LG Display, which is expanding Gen 8.5 capacity. In comparison, Samsung, with 22.4 percent share, is plowing capital outlay into adding more Gen 8.5 capacity. In terms of revenue, however, the two Korean giants trade places, with Samsung ranked at the top and LG Display following in second.
Overall, global production by area for large-sized LCD panels is projected to rise significantly as more capacity comes online in 2010. Production by area for large-sized LCD panels will rise 7 percent sequentially during the fourth quarter of 2010, leading to a 44 percent expansion by year end compared to 2009. Growth then will continue unabated for the next year, with production by area increasing 16 percent in 2011.
Such numbers suggest that LCD panel production could go into overdrive, contributing to an excess in panel supply attributable to the fervent expenditures in capital, iSuppli believes. Nonetheless, the same strategy of capacity expansion from panel suppliers will lead to price reductions because of oversupply, and also help to trigger market demand, especially for larger-sized TV panels.
In what has become an aggressive race to build bigger and better next-generation fabs, LCD panel manufacturers are set to spend nearly $17 billion in 2010 on capacity expansions, but the move is likely to trigger an oversupply of LCD panels on the market, especially at the end of the fourth quarter of 2010 and in 2011, according to iSuppli Corp.
The LCD panel manufacturers with the projected highest capital expenditures for 2010 include the South Korean giants of LG Display, in first place with approximately $4.6 billion (5.5 trillion Korean won); and Samsung Electronics Co. Ltd., in second with $4.3 billion (5 trillion Korean won). Virtually tied in third place are Taiwan’s AU Optronics Corp. and Chimei Innolux Corp. (also known as CMI), with $3.1 billion (NT $100 billion).
For the Top 13 LCD panel makers, capital expenditures in 2010 are forecasted to reach $16.9 billion, up a hefty 43.2 percent from $11.8 billion in 2009.
The increased capital expenditures—all planned with an eye toward expanding LCD panel capacity— come in the wake of expected strong demand among consumers for larger-sized LCD-TVs and other specialized technology carried by flat-panel televisions, including 3-D and LED backlighting. Going forward, iSuppli forecasts the LCD panel market to be worth $94 billion in 2010, $105 billion in 2011 and $114 billion in 2012.
For LCD panel suppliers, a higher level of capital spending is needed in order for them to grow or maintain valuable share of market. Commanding the biggest unit share in the first quarter of the large-sized LCD panel market, at 24.9 percent, was LG Display, which is expanding Gen 8.5 capacity. In comparison, Samsung, with 22.4 percent share, is plowing capital outlay into adding more Gen 8.5 capacity. In terms of revenue, however, the two Korean giants trade places, with Samsung ranked at the top and LG Display following in second.
Overall, global production by area for large-sized LCD panels is projected to rise significantly as more capacity comes online in 2010. Production by area for large-sized LCD panels will rise 7 percent sequentially during the fourth quarter of 2010, leading to a 44 percent expansion by year end compared to 2009. Growth then will continue unabated for the next year, with production by area increasing 16 percent in 2011.
Such numbers suggest that LCD panel production could go into overdrive, contributing to an excess in panel supply attributable to the fervent expenditures in capital, iSuppli believes. Nonetheless, the same strategy of capacity expansion from panel suppliers will lead to price reductions because of oversupply, and also help to trigger market demand, especially for larger-sized TV panels.
Posts
No comments: