EL SEGUNDO, CA – Global third-quarter large-sized LCD panel revenue is expected to increase by more than 17% sequentially and 45% year-over-year, iSuppli Corp. believes.
 
“iSuppli estimates that revenue rose to $16.7 billion in the second quarter, up from $13.4 billion in the first,” said Sweta Dash, director, LCD and projection research for iSuppli. “Despite an anticipated softening in demand growth in the fourth quarter, with the strong third-quarter results we expect large-sized LCD panel revenue for all of 2007 to rise by more than 27%” year-over-year.
 
As for shipments, the large-sized LCD market is expected to reach 370 million units by the end of the year.
 
“iSuppli expects 20% unit growth for monitor panels, 35% growth for notebook panels and 51% growth for the TV panel market in 2007 compared to 2006,” Dash said.
 
LG.Philips LCD started the earnings season off impressively, announcing an 18% increase in revenue sequentially and a 43% rise year-over-year, says the firm.
 
Samsung followed with an equally impressive 20% increase in LCD revenue compared to the second quarter, and a 34% increase compared to the third quarter last year.
 
Suppliers of large-sized panels fell short of demand in the quarter as a result of customers placing orders for the holiday season earlier than usual. Other factors behind the shortage included cuts in panel suppliers’ fab utilization rates in the first half, slowed production expansion plans and greater capital-spending discipline among LCD makers, according to iSuppli.
 
Suppliers of desktop-computer monitor, notebook and 32" and smaller TV panels remained constrained throughout the quarter, spurring significant price increases.
 
Most mainstream notebook and monitor panel prices increased by 7 to 10% from June to September, after a 10 to 15% price increase from the previous three months. The average 32" and below TV panel price rose by only 2 to 3% from June to September after a 4 to 5% price increase from April to June, according to iSuppli.
 
The 40/42" TV panel price decreased by less than 5% from June to September, the firm says.
 
Profitability among the large-sized LCD suppliers was better in the third quarter than the second. Monitor panels were particularly profitable.
 
TV panel profitability lagged behind the notebook and monitor panels in the quarter. This resulted in a partial shift in production capacity from TV panels – especially the 32" size – to monitor panels.
 
The phenomenon contributed to the supply tightness, resulting in panel price increases and higher profitability compared to the prior quarter. The 32" and 40/42" WXGA TV panels generated a 5 to 15% profit margin in the quarter.
 
The LCD-TV market is shifting to larger sizes because of the increased availability of bigger panels at lower prices. Furthermore, the move to thin form-factor and wide-format LCD display technology means consumers can more easily fit televisions with larger screen sizes into their homes. This trend, combined with HD resolutions, means such large-screen sets are practical for more consumers.
 
This shift to larger-sized panels will boost revenue and profitability for the TV panel makers. The monitor panel market also is shifting to the 19", 20" and 22" sizes.
 
The global LCD-TV panel market in 2008 is expected to expand to 102.5 million units, up 27.2% from 2007. This will mark the first time shipments will surpass the 100 million mark, says iSuppli.
 
 
 

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