Happy days are here again
The skies above are clear again
So let’s sing a song of cheer again
Happy days are here again
- "Happy Days Are Here Again," Lyrics by Jack Yellen (1929)

The headlines are all over the trade news websites and company press releases: "AUO Returns to Profits in Q1′10," "LG Display Posts 29% Increase in Q1′10 Profits," "Top-4 LCD Panel Makers See Strong March Shipments," "TFT LCD Equipment Spending Approaches All Time High in 2010." DisplaySearch reported that February sales of TFT-LCDs were up 97% year over year for large displays and 69% for small and medium displays (by revenue). Only a couple of small players missed this rising tide.

Ken Werner
Senior Analyst and Editor

Although the global economy’s rise from the depths of the Great Recession continues to be slow and painful, everything seems to be coming together for panel makers. Remarkably, the TV industry never died during the recession, although buyers did retreat to smaller screen sizes. Netbooks filled a need during the recession for low-cost notebooks, and they continue to sell well without cannibalizing full-size notebooks all that much.

Enterprises are beginning a long-awaited computer upgrade cycle. Panel makers are turning out notebook panels as if they were doughnuts. LG Display is reportedly devoting 25% of its Gen 6 capacity to notebook panels. (LGD reportedly shipped 5.1M notebook panels in March, while Samsung shipped 4M, AUO shipped 3M, and Chimei Innolux (CMI) shipped 1.8M.)

eReader sales are exploding, and Apple has seemingly convinced everybody that consumers are ready to adopt tablet computers en masse. We’ll see if this turns out to be as big a deal as gadget-makers hope, but LG, Samsung, Google, Nokia, and many others are tossing their hats in the ring.

Smart phone sales continued to rise during the recession, creating a market for high-end small LCDs and AMOLEDs. And 3DTV is giving set makers and consumers something to get excited about. (The category may even give plasma’s market penetration a long-deserved boost, as Steve Sechrist pointed out in Tuesday’s DD.) Some analysts even expect 3DTVs to have significant sales in China this year. Dr. Qun Yan, Chief Scientist at Sichuan COC Display Devices, told me simply, "There are lots of rich people in China."

So the industry is enjoying the fact that traditional product categories are resurging, and new products are creating new slots for displays to plug into.

We also have, for the first time in a long time, several viable new display technologies that could enable new — or, at least, newly functional — product categories. These display technologies generally fall under the category of ePaper, but as their development programs reveal greater and greater capabilities, there is a good chance that some of them could compete directly with LCDs in selected applications. For that reason, LiquaVista’s Johan Feenstra calls the category "LCD 2.0."

So, things look good for the flat-panel display industry. Could displays be that "leading indicator" of recovery everyone’s been looking for?