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Shipments of Large-Size LCD Panels Will Drop in 2016 but Their Total Area Will Expand by 8%, Says TrendForce

27 November 2015 Display TrendForce

WitsView, a division of TrendForce, estimates that the shipments of large-size LCD panels  (sized 7 inches and above) for the entire 2015 will reach 794 million units in its latest report. This figure represents a 4.1% year-on-year drop and a first-ever annual shipment decline for the LCD panel industry. The anemic IT application market has been a drag on large-size panel shipments during this year. On a brighter note, panel shipments in the TV application market have been strong and provide the critical support for large-size panels’ total shipment area, which is projected grow 3.8% year on year in 2015.

According to WitsView’s forecast for 2016, large-size panel shipments will slide to 793 million units on account of the stagnant tablet market. On the other hand, TV panel products will grow larger in average size and their shipments are projected to reach 273.6 million units. Next year’s TV market will again drive the expansion of large-size panels’ total shipment area, which is set to grow by 8% year on year.

Below are major trends that will unfold in the large-size panel market next year:

4K products will account for almost 40% of South Korean panel makers’ TV product shipments

Shipments of TV panels sized 50 inches and larger for this year are estimated at 48.7 million units and will grow to 55.4 million in 2016 as prices of this size segment becomes more affordable for the consumers. Panels sized 60 inches and above will become the market’s focus and their shipments will take up 15% of the 50-inch and above panel shipments next year. Size expansion in the TV application market will be a noticeable trend in the near future.

Another trend worth highlighting is the rise in the adoption of 4K resolution. South Korean panel makers have the most ambitious shipment targets for next year. LG Display (LGD) in particular has a leading cost advantage resulted from its development of M+ technology. 4K products may make up as much as 38% of LGD’s TV panel shipments next year. Samsung Display Corp. (SDC) will follow closely with 37% of its shipments belonging to 4K products, whereas AU Optronics (AUO) will likely rank third with about 33%. Innolux and Chinese panel makers have been behind in developing 4K products and focused more on small-size panels. 4K’s penetration rate in their respective shipments for next year will be lower than 20%.

IPS to take up to 30% of global monitor panel shipments next year and gaming market will drive development of high-end monitor panels 

Shipments of monitor panels for 2015 are estimated to total 142 million units, down significantly by 10.9% year on year. WitsView anticipates monitor shipments to remain generally flat next year, and focus of product development will be in-plane switching (IPS) panels. WitsView also estimates that around 30% of monitor panels shipped worldwide will be products based on IPS technology in 2016. Korean panel makers again will be driving the IPS adoption effort, with LGD having the lead over its competitors in terms of cost and technology as well. Next year, the penetration of IPS technology in LGD’s monitor panel shipments will be at 85%, while the respective penetration rates for SDC and BOE Technology Group (BOE) may hit 40% and 30%. Penetration rates for Taiwanese manufacturers will be lower at under 10% because of constraints in their IPS capacity.

Long replacement cycles have stalled monitor demand. Currently, the bright spot in the monitor market is the rising gaming segment, which is generating upgrade demand for monitor panels. According to WitsView’s estimation, the gaming market segment will spur the increase in the size of mainstream monitor panels and drive up the shipments of monitor panels sized 27 inches and above, from 11.8 million units in 2015 to 14 million in 2016. Larger monitor displays will complement the developments in high-resolution technologies and curved-screen designs, fulfilling the consumers’ desire for superior visual experiences. 

Panel makers to promote notebook and tablet products featuring Full HD and 3:2 aspect ratio

With the mobile PC market (i.e. notebooks and tablets) being not as robust as before, panels shipments in both applications have suffered decline. WitsView’s latest data indicates that notebook panel shipments worldwide for this year will fall 8.7% year on year to 175 million units, while the tablet panel shipments will also fall 9.6% year on year to 207 million. Annual notebook panel shipments are expected to increase slightly to 176 million units next year, whereas annual tablet panel shipments are projected to drop to 200 million.

Panel makers will also want to further differentiate their products for mobile PCs in order to maintain high utilization rates and product margins. They therefore are working to apply features such as high resolution and 3:2 aspect ratio. As price difference between Full HD panels and HD panels steadily narrows, WitsView anticipates a sharp increase in the penetration rate of Full HD in notebook panel shipments, from 18% this year to the estimated 26~30% next year. Moreover, the rising popularity of 2-in-1 PCs has resulted in growing user demand for displays that are excellent for both portrait and landscape viewing. WitsView expects 3:2 aspect ratio will be a prospective feature  that will set apart their tablet and notebook products.

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