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There doesn’t seem to be room for argument that flat-panel displays have become a volatile commodity market. Two market research firms – NPD DisplaySearch and IHS iSuppli – come to different conclusions on the fate of the liquid crystal display (LCD) market this year. Within days of one another, NPD DisplaySearch and IHS iSuppli forecast both growth and decline in LCD shipments for 2013.
This is not surprising: competition has forced the prices of LCDs steadily downward over the past several years. Many suppliers, struggling to maintain a profit, have spun off their LCD businesses into separate divisions while focusing R&D on more profitable technologies such as OLED. The transition has meant a shift away from LCD capacity, which ramps up and down similar to the semiconductor market. A drop in LCD inventory means capacity ramps up; by the time finished goods hit the market, LCD inventory has corrected itself.
The latest reports measure different LCD end-market applications, which accounts for some of the discrepancy. NPD includes PCs in its forecast for large-area LCDs – 9 inches or larger—which drags the overall forecast down. The outlook for the LCD TV market is a little brighter.
NPD forecasts shipments of large-area LCD panels to decline 6 percent in 2013 versus 2012. “Panel suppliers expect to ship 710 million units this year, compared with 754 million a year ago,” the firm said. “The biggest drops are in PC applications, with monitor and notebook panel shipments each falling 13% Y/Y and mini-note PC panels falling 66% Y/Y. Tablet PC panel shipments continue to grow, but at the much-reduced rate of 4% Y/Y, compared to 61% in 2012. LCD TV panel shipments also continue to moderate, growing 6% Y/Y compared to 10% in 2012.”
IHS iSuppli expects shipments of large LCD panels for TV applications to increase. Global shipments of LCD and plasma flat-panel televisions amounted to 47.6 million units in the first quarter, up 0.4 percent from 47.5 million during the same period one year earlier. “Even with weak results in February and March, the rise for the entire first quarter sets the stage for the global flat-panel TV market to return to growth this year, with a slight 0.4 percent increase expected in 2013,” said Jusy Hong, senior analyst, television research, for IHS.
There are still enough variations in displays – size, resolution and price – that some configuration will always be in demand. Currently, both analysts forecast, it’s large-sized LCDs for TVs.
Regardless of application, the LCD production market now looks a lot like the DRAM market did two decades ago. DRAM, like displays, are used in almost all electronics products. Competition in DRAM forced market prices down and suppliers scaled back capacity. A slight fluctuation in supply and demand resulted in a rapid ramp-up and subsequent DRAM inventory buildup. Suppliers would scale capacity back again, and the cycle would continue.
The DRAM market hasn’t really bucked the issue of volatility – peaks and valleys still occur almost regularly. Because LCDs are manufactured much like semiconductors are, it’s likely the display market will follow suit.
