NPD DisplaySearch expects that tightness in the supply of TV, notebook and monitor panels to continue in Q3. Inventory adjustments will be made in Q4, and the firm expects to see shortages again next year.
David Hsieh’s most recent blog post (http://tinyurl.com/npom9y2) discusses this prediction. Several factors contribute to the possibility. First, panel shipments have exceeded set shipments in 2013 and 2014, leading to buildup. However, upcoming holidays such as China’s Golden Week and Black Friday are expected to reduce inventories significantly.
Second, area growth and demand growth for TFT LCD and AMOLED panels are expected to rise by a similar amount next year (6.8% and 6.5%, respectively). Last year, the figures were 4.5% growth in supply and 7.9% in demand, creating shortages. However, the conversion of existing TFT LCD fabs to AMOLED backplane production will lower effective capacity. The establishment of new fabs, especially in China, will likely be slow. Capacity could this grow slower than demand in 2015.
Third, considering the sub-5% growth in TFT capacity over the last two years, component makers have been ‘reluctant’ to increase their own capacity. A rise in panel capacity next year may lead to component shortages – limiting panel availability. Additional component development would be required for new panel technologies. Smart handheld devices could also monopolise driver IC wafer and foundry capacity. Even more capacity, for chemicals and optical films, could be consumed through shifts to high resolutions.
Finally, Hsieh expects competition to heat up between TV vendors. Japanese brands are losing share, while Korean and Chinese brands are competing to raise theirs. Chinese makers, in particular, are seeking to increase international exports. Vendors are increasing their shipment plans, meaning that they are prioritising securing panel allocations,r ather than negotiating prices. At the same time, the supply chain is becoming increasingly integrated and panel makers are raising production of open cells, to address the expansion in TV models. Panel procurement is expected to rise, based on these factors.
