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Large-Size LCD Panel Shipments Fell Just 2.4% Monthly in October as Vendors Continue to Stock Up for Promotional Events, Says TrendForce

22 November 2016 Display Iris Hu

Though panel shipments were strong in October, they represented a monthly drop from the much larger shipments in September. WitsView, a division of TrendForce, reports that October shipments of large-size panels (sized 7 inches and above, resolution at WSVGA and above) totaled 66.83 million units, down slightly by 2.4% compared with the prior month.

According to WitsView, large-size LCD panel shipments in October were supported by demand in China, where branded device vendors extended their promotional sales period for the fourth quarter. Likewise, panel demand in North America was also sustained by the stock-up activities before the holiday period. Furthermore, the presidential election in the U.S. had triggered a wave of replacement demand for PCs from the country’s government and military organizations.

Global TV panel shipments for October totaled 23.01 million units, down 0.3% from September. “The scheduled closure of a Samsung fab has caused the supply to tighten and prices to rise for panels sized 40 to 45 inches,” said Iris Hu, WitsView research manager. “To avoid high panel costs and improve profitability, TV brands have shifted their attention to the larger size segments. As a result, monthly shipments of panels sized 55 inches and above expanded 3% in October, countering to the trend of decline.

LG Display (LGD) retained its first-place position in the monthly TV panel shipment ranking with 4.56 million units shipped, representing a drop of 3.5% compared with September’s shipments. LGD posted a decline in TV panel shipments mainly because the panel maker has allowed some deliveries to be made ahead of schedule before October as to allow several TV brands to launch their products early.

Among the six largest panel makers worldwide, China-based BOE Technology (BOE) suffered the largest monthly decline in TV panel shipments during October. BOE had changed its product mix and allocated more of its production capacity to the making of notebook panels. Hence, BOE’s TV panel shipments for the month arrived at 3.42 million units, translating to a decline of 5.5% compared with the prior month.

In the monitor panel market, demand is tapering off as monitor brands are finishing up stocking up for the year-end holiday period. Moreover, monitor brands are struggling to maintain profitability as the average price of mainstream 21.5-inch panels has increased by almost 15% during the past five months. To offset panel costs, some brands have raised prices for their monitor sets.

Global shipments of monitor panels for October fell 1.8% monthly to 12 million units as brands became more conservative in their panel purchases. LGD in particular saw its monitor panel shipments drop 8.8% from the prior month to 3.24 million units. The larger September shipments and capacity utilization rate issues led to this unusually sharp decline.

BOE for the first time became the leader in monthly notebook panel shipments

Shipments of notebook panels in October came to 14.91 million units, representing a drop of 5.4% versus the prior month. Demand slowed down as notebook brands finished stocking up for their year-end sales events. However, BOE was able to achieve a new monthly high in notebook panel shipments, registering an increase of 8.8% to 3.91 million units. For the first time, BOE managed to surpass LGD and became the leader in the notebook panel market.

“BOE benefitted from the U.S. market, where government and military agencies were busily replacing their computer systems ahead of the presidential election,” Hu noted. “This wave of replacement demand also lifted the demand for HD resolution, Twisted Nematic (TN) panels belonging to mainstream-size categories. Additionally, South Korean panel makers have scaled back their HD TN panel production, so BOE was able to pick up additional orders and greatly expand its notebook panel shipments.”

With the tablet market becoming saturated, branded tablet makers have less drive to stock up for the year-end holiday season. Thus, tablet panel demand during the traditional busy period has been falling on yearly basis. This October, however, saw U.S. brands and white-box vendors expanding and extending their stock-up activities in preparation for a big promotional push during the Christmas holidays. Monthly shipments of tablet panels therefore reached 16.91 million units in October, down just 3.1% from September.

On the back of Apple’s demand, LGD increased its tablet panel shipments by 7% compared with the prior month to 2.4 million units. Also, Amazon’s aggressive promotion of its low-price tablets caused shipments of 7-inch WSVGA panels from Taiwan’s Chungwha Picture Tubes (CPT) to register a huge monthly increase of 33.3%. On the whole, CPT’s tablet panel shipments for October rose 8.5% over the prior month to 3.51 million units.

“As the busy stock-up period is about to finish, branded device makers are under greater to pressure to keep their inventories low at the end of year,” Hu pointed out. “They therefore will be more conservative in their panel purchases.” Furthermore, major panel makers are revamping their production facilities and adjusting their product mixes, so there is going to be some loss in the overall panel production capacity.

Looking ahead, panel market will see shipments in different application segments corrected downward during November. Tablet and monitor panel shipments will fell 2~3%, respectively, compared with October. Chinese TV brands will sustain TV panel shipments in November as they address the issue of tight supply for mid-size panels and continue to stock up for the next Chinese New Year holidays. Therefore, global TV panel shipments for November will fall only by 1~2% compared with the prior month. As for notebook panel shipments, they are expected to stay constant in November because of a flurry of notebook orders from governments worldwide.

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