IHS Markit said that the flat panel industry will grow by 9.3% in 2017 to $110 billion, after two years of decline. Firmer pricing will be the key factor as supply has become tighter this year as volume is only expected to increase by 0.3%, while area will grow by 6.6%.
“While it would be a unrealistic to expect an increase in unit demand next year in view of an overall sluggish global economy outlook, market revenue for flat panel display can be expected to grow significantly following a rebound in panel prices along with an increased demand for premium display products,” said Ricky Park, director of Display Research.
The rebound in panel prices is attributed to supply-related issues such as restructuring of LCD fabs, production halts, and deteriorating yields from the maximization of production efficiency. Price increases were not just restricted to TV panels, but also smartphone, desktop monitor, and mobile PC-use panels, all of which turned upward from the second quarter of 2016.
Revenue growth is also being pushed by an increased supply of premium products that has raised the overall ASP. The demand switch towards premium products, include consumer preferences for larger-size displays for TVs, desktop monitors, and tablets and for high-definition panels, including ultra-high definition displays. There was also a demand switch for AMOLED panels in smartphones, and for oxide and LTPS panels in mobile PCs and desktop monitors.
Analyst Comment
This looks like good news until you spot that revenues this year will be way down on 2014 and are not forecast to recover to those levels until after 2020. Despite this, companies continue to invest heavily into new technology areas. (BR)
