The latest report from WitsView, a division of TrendForce, finds that the supply of low-end panels for notebooks and tablets has declined as South Korean panel makers scale back production at some of their fabs and focus mainly on products for high-end applications. Global shipments of large-size LCD panels (7 inches and greater) will continue to contract in 2017, registering an annual decline of 2.4% to around 725 million units. On the other hand, the supply area of large-size panels will expand next year on account of strong demand for large monitors and TV sets. WitsView forecasts that global supply area of large-size panels will post an annual increase of 3.8% in 2017.
Expansion in panel supply area results from growing demand for larger TVs and monitors
In the TV panel market, there is a growing likelihood of shortage for mid-size panels (40 to 45 inches) in 2017 due to Samsung Display (SDC) closing its L7-1 LCD fab by the end of this year. The loss of this fab will cause global shipments of TV panels for 2017 to drop slightly by 1.1% compared with the prior year to 258 million units. In terms of sizes, South Korean and Taiwanese manufacturers will increase the share of the 65-inch in their respective TV panel shipments as to differentiate themselves from Chinese competitors. WitsView estimates that shipments of 65-inch TV panels will total around 750 million units for 2016. Furthermore, 65-inch TV panel shipments for 2017 are projected to register an annual growth of 20%.
Additionally, the production of 75-inch TV panels is gradually picking up. Rising demand for 75-inch and 65-inch TV sets will increase the supply area of TV panels by 4.3% annually in 2017.
In the monitor panel market, annual shipments for 2017 are forecast to arrive around 140 million units, up 2.2% from 2016. Among different application markets for large-size panels, the monitor market is expected to be the only one that will witness panel shipment growth next year. WitsView noted that the penetration of the wide viewing angle technology in the monitor market has reached a certain level. Hence, monitor panel supply will not be affected significantly even as South Korean manufacturers decrease their production of low-end panels. Furthermore, the overall monitor panel supply is expected to grow because Chinese makers are adding production capacity via their Gen-8.5 fabs.
Other factors that will boost monitor panel supply in the near future include rising monitor demand from internet cafés and growing popularity of monitors with narrow bezels. On the whole, the supply area of monitor panels is forecast to grow by 3.6% annually in 2017.
Shipments of notebook panels for 2017 are projected to total just around 154 million units, translating to an annual decline of 5.2%. WitsView pointed out that HD resolution, twisted nematic (TN) panels accounts for most of the notebook panels that are being shipped. Unlike the monitor market, the notebook market has not witnessed widespread adoption of the wide viewing technology. Furthermore, displays featuring FHD or higher resolutions account for much smaller shares of the notebook market. With South Korean panel makers reducing their low-end panel shipments for strategic reasons, the supply of HD TN panels is expected to drop sharply in 2017. In sum, shipments of notebook panels will decline next year despite Chinese panel makers providing additional production capacity.
As for tablet panels, next year’s shipments are forecast to drop as well by 5.2% annually to 173 million units. Due to depressed tablet demand, WitsView believes panel makers will be very conservative in their tablet panel production plans.