The long-standing display industry trend, where commodity displays – led by 32″ HD units – were a key revenue generator is changing, says IHS. While profits generated by 32″ panels rose 24% YoY in Q1’15, they are expected to fall 22% in Q1’16.
The forecast fall reflects a decrease in the price of most LCD TV panel prices post-Q1’15. Prices will reach their lowest level in Q2’16, according to IHS research director Yoshi Tamura. “Since equipment depreciation cost is factored into 8th-generation fabs, the total LCD profit margin is expected to turn negative next year”, he added.
LCD panel makers are increasing their capacity in China. Here, G8 fabs produce 32″, 48″, 49″ and 55″ displays. However, as 32″ profit margins narrow, manufacturers are expected to shift towards larger sizes – thus lowering prices and increasing demand for 48″+ units.
