WitsView, a division of TrendForce, reports LCD TV panel shipments for this first quarter totaled 60.16 million units, representing a drop of 10.7% compared with the prior quarter but also a year-on-year increase of 0.4%. Looking at major trends in the TV panel market, the growing demand for 4K resolution is accompanying the steady increase in the average panel size. Despite seasonal headwinds, first-quarter shipments of UHD (4K resolution) TV panels went up 0.5% sequentially to reach 20 million units for the first time ever and accounted for 33.3% of the total TV panel shipments.
Going into the second quarter, the TV panel demand is shifting from the 40- to 43-inch segment to the 55- to 65-inch segment. “Prices in the 40- to 43-inch segment are too high for TV brands to create promotional offerings for China’s major sales events during the second quarter,” said Iris Hu, research manager of WitsView. “Panels in the 55- to 65-inch segment on the other hand provide higher margins.”
Additionally, major international TV brands are aggressively positioning themselves in the 75-inch size segment. With increasing market preference for larger sizes, shipments of TV panels for the second quarter is projected to record a small sequential growth of 1% in unit volume. In terms of area, however, the growth over the first quarter is expected to be larger at 4%.
LGD retained first place in ranking for this first quarter while UHD penetration rates rose significantly in SDC’s and AUO’s shipments
WitsView’s survey of TV panel suppliers for this first quarter shows LG Display (LGD) posted a 7% decline from last year’s fourth quarter with 12.63 million units shipped. LGD’s LCD TV panel shipments fell as the supplier adjusted the product mix for one of its Gen-8.5 fabs and allocated more of its production capacity to making OLED products. The supplier also cut back on the production of monitor panels sized 21.5 inches wide and smaller and instead expanding production of monitor panels sized 23.8 inches wide and 27 inches wide. This is also in response to monitor brands’ need for larger panels to raise their product margins. In doing so, LGD also took away some of its Gen-8.5 capacity originally intended for TV panels. Despite recording a noticeable decline, LGD was still first place in TV panel shipment ranking in this first quarter.
Against the prior three-month period, Innolux shipped 9.94 million units of TV panels this first quarter and registered a decline of 9.3%. Demand for Innolux’s 39.5-inch products fell as TV brands reached their price limits for the mid-size segment. While Innolux saw an increase in orders from Samsung Electronics for its 65-inch panels, the supplier was not able to significantly increase shipments for this size category due to low product yield rate.
BOE Technology (BOE) shipped about 9.41 million units this first quarter, amounting to a drop of 2.8% from the previous quarter. Since September of 2016, BOE has been adjusting its product mix to increase the share of notebook panels at the expense of the 32-inch TV panels. This has led to continuing decline in BOE’s TV panel shipments. On the other hand, BOE significantly raised shipments of its 43-inch panels by 26.6% sequentially in the first quarter. With its Gen-8.5 fab in Fouzhou, China, at the final preparation stage for mass production, BOE aggressively priced its 43-inch panels to entice TV brands.
TV panel shipments from China Star Optoelectronics Technology (CSOT) fell 3.3% this first quarter compared with last year’s fourth quarter to come to 8.97 million units. There was no increase in CSOT’s production capacity during the first quarter, and the supplier’s shipments were further affected by seasonality. However, CSOT did enjoy a 15% sequential growth for its UHD products owing to strong demand from TV brands. To increase the margins of their TV set lineups, brands are increasingly using the UHD feature.
Samsung Display (SDC) went from being second place in the ranking to fifth place between last year’s fourth quarter and this year’s first quarter. This plunge was mainly attributed to the closure of the L7-1 fab in the final month of 2016. Consequently, the supplier’s TV panel shipments for the first quarter suffered a sequential decline of 27.6%, totaling just around 8.86 million units. Though SDC had a very poor overall performance, the company was ahead of its competitors in the shipments of 75-inch TV panels, growing the volume by 30% sequentially in first quarter to reach 130,000 units.
Also, SDC’s recent overhaul of its manufacturing equipment has led to a large shipment expansion for large-size UHD panels. SDC actually became the first panel maker to surpass 50% in UHD penetration for TV panel shipments during this first quarter. UHD-resolution products accounted for 52.8% of SDC’s TV panel shipments for the period.
AU Optronics (AUO) shipped around 6.63 million units in the first quarter, a 6.7% drop versus the prior quarter. While AUO has limited production capacity, the company manages to stay competitive by increasing shipments of large-size and niche products. Thus, AUO posted a 3.8% sequential increase in shipments of 65-inch and larger panels. Furthermore, the UHD penetration in supplier’s first-quarter TV panel shipments came to 40.7%, up from 36% in last year’s fourth quarter.