Falling July Panel Shipments Indicate Slowing Demand

37.7 million m² of large (9.1″+) TFT panel were shipped in Q2, NPD DisplaySearch said recently (Display Monitor Vol 21 No 33). Now, the firm has released a report showing that unit shipments reached 181 million – the second-highest result ever. A new record was achieved for LCD TV panel shipments, at 64 million units. However, shipments in July were down compared to June, which could indicate slowing shipments in the near future.

Supply of LCD TV panels has been tight this year, despite high shipments in 2013, due to new products and technologies. Changes in the supply chain and end markets have also affected supply. In Q1, this situation began to impact panel prices. Q2 saw a continuation in trends from Q1, including a shift to larger sizes, value chain realignments and aggressive positioning for end-of-year sales.
Both notebook and monitor panel shipments fell last year. Production plans were conservative for 2014. However, demand has been higher than expected, due to the increase in interest caused by low-cost products such as Chromebooks. The end of support for Windows XP has also had a knock-on effect on LCD monitor demand. However, vendors have been reluctant to increase production due to low margins, so some PC brands have had difficulty sourcing supply.
Tablet demand has shrunk, but smartphone demand continued to grow in Q2. The market is shifting towards larger sizes and higher resolutions. Growing demand from automotive and commercial markets have contributed to tight tablet panel supply this year.
Tight supply of tablet (and notebook) panels can also be laid at the feet of PC – particularly tablet PC – brands, which have been implementing inventory control. Tablet panel shipments (of all sizes) were 25 million in July, down 17% MoM from 30 million in June. The figure was the lowest result since August last year.
Monitor and TV panel supply has been tight in 19.5″ – 40″ sizes. While the monitor market is fairly stable, some brands have been lowering orders to control inventories.
In terms of LCD TV, Samsung and LG have both been slowing their panel purchases. However, European, Chinese and American brands are raising their orders. DisplaySearch has said that the trend towards large sizes ‘continues to be remarkable’: 50″+ panels shipped 3.5 million in May; 3.8 million in June; and 4 million in July.
UltraHD LCD TV panel shipments reached a new high in July, at 1.74 million. The figure represents 13% MoM growth and 8% penetration. Features continue to be upgraded, with vendors now adopting wide colour gamuts, leading to corresponding rising prices. Innolux leads the market with 36% of shipments, followed by LG Display (23%), Samsung Display (21%) and AUO (11%). Chinese vendors are gradually acquiring the ability to produce UltraHD panels, increasing their combined share from 5% in June to 7% in July.
There have been concerns about panel over-shipments in Q2, which could lead to inventory adjustments in the second half. However, DisplaySearch says that large-area panel shipments were actually down 7% MoM in July – a possible indicator of slowing shipments in Q3 and Q4.