Taiwanese manufacturers of liquid-crystal-display (LCD) panels may experience a drop in shipments in the fourth quarter, Taipei-based market researcher Market Intelligence Center (MIC,
The prediction comes amid speculation that supplies will rise ahead of the slow season in the first quarter of next year, MIC said in its latest industry report issued last week.
Overall, the researcher said shipments of computer and television flat panels from local suppliers led by AU Optronics Corp (友達光電) are expected to fall by 3.7 percent to 48.15 million units in the fourth quarter from an expected 50 million units in the third quarter.
The projection for the third quarter represents an increase of 12.6 percent from 44.4 million units in the second quarter because of easing oversupply, MIC said.
On the market for small panels, MIC said it expected robust growth in the second half. Shipments for flat screens smaller than 10 inches are expected to grow by 75 percent year-on-year to 135 million units in the third quarter and to rise 40 percent year-on-year to 132 million in the fourth quarter.
"End demand for mobile phones, digital frames, digital cameras and personal navigation devices is rising additionally on seasonal factor and that will boost shipments of small-sized screens from local firms," MIC said.
On the price front, MIC said it expected panel prices to hold steady in the fourth quarter because of growing demand for better-priced bigger panels -- such as 20-inch computer screens and 40-inch and larger TV panels -- after local companies ramped up their next-generation (7.5G) manufacturing.
Prices for some panels, such as 19-inch computer screens, may continue to rise gradually next quarter because of limited supplies, the researcher said.
"Market demand will sustain in the fourth quarter based on panel makers' sales reports," MIC said in the report.
It said local companies such as AU Optronics and Chi Mei Optoelectronics Corp (
Lehman Brothers said in its monthly industry report that it expected both AU Optronics and Chi Mei to exceed analysts' expectations on the back of a strong recovery in the third quarter and an upward trend in panel prices.
"We expect to see top-tier makers post stronger growth momentum than the smaller players," Lehman Brothers said in the report released on Sept 18. "We think larger players' abilities to optimize their product profiles among various applications and their continued capacity investment has started to show benefits."
By comparison, smaller players generally show an inability to expand capacity, with their growth relying solely on monitor panel pricing, which has peaked last month and this month, the US brokerage said.
Lehman Brothers said that it believed larger panel makers were better positioned for revenue growth in the third quarter, as evidenced last month.
AU Optronics, the world's third-largest LCD panel maker, said earlier this month that its sales last month increased 89 percent from a year earlier to NT$44.1 billion (US$1.33 billion), setting an all-time high for the fourth consecutive month, while Chi Mei's sales last month rose 69 percent from a year ago to NT$29.5 billion.
AU Optronics also topped worldwide shipments of large-sized TFT-LCD panels last month for the first time, according to market researcher DisplaySearch.
The Taiwanese firm shipped a total of 7.6 million units in large-sized panels last month, followed by Samsung Electronics Co's 7.4 million units and LG.Philips LCD Co's 7.3 million.
Last week, DisplaySearch said global panel makers might increase spending on new equipment by 13 percent year-on-year next year in response to growing demand and in the hope of improving financial performance.
The Austin, Texas-based researcher expected similar growth in 2009. Equipment spending for this year is expected to contract 35 percent to US$8.2 billion after three consecutive years of heavy spending over US$10 billion.
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