FPD Market Outlook Affects the Value Chain
By Yoshio Tamura, senior VP, senior analyst, DisplaySearch
Although the flat panel display (FPD) industry is concentrated in Asia, its value chain involves global SEMI members who supply equipment and materials to Korean, Taiwanese, Chinese and Japanese FPD companies. The industry is rapidly growing as TVs and smart phones/tablets use more liquid crystal displays (LCDs). In addition, the rapid growth of LCD TV segment leads an explosive growth of the LED industry that generates many opportunities for SEMI members. The following outlines the latest trends and future outlook for the FPD market.
FPD China 2011
GFPC: Global FPD
Partners Conference 2011
FPD Market in 2010
Global Economy: The GDP of individual countries favorably recovered until the middle of 2010 but the Greek financial crisis led to the weakness of the Euro. In China, the wage hike row accelerated the shift of producers to the inland areas. As a result of the conclusion of the Economic Cooperation Framework Agreement (ECFA) between China and Taiwan and the ECFA between Korea and EU / the U.S., Japan is left behind due to its policy of agricultural protection. The yen remained to be the sole major high currency.
Restructuring: In Taiwan CMI, consolidated company from CMO, Innolux and TPO started its operation. AUO acquired AFPD.
LED Backlight: A sharp increase in the demand for LED backlight resulted in the shortage of light guide panels, LED chips and optical films in the first half of 2010. LED chips turned to oversupply due to an increase in LED supply and decrease in the number of chips in backlight units in the second half of 2010. The shortage of light guide panels was eliminated in the second half of 2010 and they are balanced in the Q1 of 2011.
3D TVs: The commercialization of 3D TVs was facilitated but their limited contents and high prices caused poor sales in 2010.
Tablet PCs: The introduction of iPad by Apple created the demand for tablet PCs as a new application. As PC/mobile phone manufacturers started their commercialization one after another, Tablet PCs sharply boosted the demand for IPS/FFS panels.
LCD Panel Prices: The prices of LCD panels, which had risen at the beginning of spring in 2009 and hovered at a high level until the Q1 of 2010, started gradually falling in the second quarter of 2010, plunged in the third quarter, and in the fourth quarter, those for ITs stopped dropping while those for TVs continued declining. Manufacturers of large LCD fell into the red in the financial results for the fourth quarter.
Special Demand for LCD TVs: In the Japanese market during 2010, the special demand from the Eco points created the bubble demand of more than 2.5 times of the average, and resulted in over 23 million units. However, it is expected to decrease by half to 12 million units in 2011.
LCD Plants in China: Korean and Taiwanese manufacturers are expected to start mass production for the G7/G8 lines in China during the second half of 2012.
Increase in Demand for LTPS/IPS: Japanese manufacturers of small and medium LCDs actively adopted the LTPS and IPS for smart phones. The Apple effect fueled the IPS and LTPS investment fever among foreign LCD manufacturers.
Touch Screens: Smart phones and tablets sharply increased the demand for touch screens. The capacitive type continued its rapid growth. The shift of LCD/CF lines to produce touch screens was promoted.
FPD Market from 2011 Onward
Change in the Demand Structure: The proportion of the emerging countries will further increase in the global demand. The full-fledged commercial production in Chinese LCD plants in the year of 2011-2012 will trigger the age of fundamental structural reform in the LCD industry (global enterprises).
Restructuring: Japanese manufacturers of small and medium LCDs may make investments in cooperation with Apple. Further restructuring, such as alliance of Hitachi Display and Hon Hai, may occur.
AMOLED (SMD, Samsung Mobile Display): The 5.5th generation line will start mass production in the second quarter of 2011 (24K sheets per month). They are expected to be supplied for Samsung’s smart phone, Galaxy. The 8th generation line for TVs is expected to start production with 10K sheets per month in the pilot line during the second quarter of 2012 and start mass production with 30K sheets per month in the second half of 2013.
LTPS Supply Shortage: The demand for LTPS sharply increased in the smart phone market and shortage in supply of LTPS panels is highly likely in 2011 as new lines are unable to start commercial production in 2011.
Graph: Small/Medium LTPS LCD Supply vs. Demand
- Sharp Increase in Capacity of Chinese LCD Manufacturers: In China, BOE/CEC-Panda/China Star will be launched earlier than foreign companies will start production of LCD TV panels in 2011.
Graph: TFT LCD Capacity by Region
Cell Business: In the LCD TV panel market, the proportion of shipment of open cells and cells will sharply increase to up to 30% in 2011.
LCD TVs: As the replacement of CRT TVs has almost completed, the global LCD TV market will move toward a mature state from 2011.
3D TVs: The 3D feature will be increasingly incorporated as standard specification in the TV set hardware of 120 Hz (double speed drive) 40-inch and larger size. They will sharply increase to 18 million units from three million units in 2010.
LED Backlight: The LED backlight penetration rate in LCD TV panels will reach more than 50% in 2011. What is drawing attention is whether the LED backlight will be incorporated in LCD monitors as in LCD TVs. It is probably to lower LED price premium.
Graph: LED Backlight Penetration in Large area applications
Getting Thinner: The adoption of the 0.5-mm thin board, which has reached the 6th generation, will further move to the 8th generation line from 2011 and beyond.
LCD Panel Prices: They will fall in the Q1 of 2011 and touch the bottom and rebound in the Q2 of 2011. However, the price rise in the second half 2011 will be smaller than the one in the second half of 2009. Because LCD supply vs. demand situation in the second half of 2011 is expected to become tight not shortage like the second half of 2009.
GFPC (Global FPD Partners Conference) 2011
April 10-12, 2011
March 1, 2011