With four new next-generation production lines scheduled to begin operation this year, the panel industry will continue to face oversupply challenges, the Photonics Industry & Technology Development Association (PIDA, 光電科技工業協進會) said on Thursday.
In the first quarter, supply is estimated to exceed demand by 125.5 percent for the panel industry. Although demand is expected to pick up in the third quarter and reduce the oversupply level to 109.7 percent, the oversupply situation will continue, Taipei-based PIDA said.
PIDA analyst Karen Ho (何孟穎) said the South Korean electronics giant Samsung Electronics Co would start two eighth-generation (8G) production lines this year, increasing its capacity by 28 percent.
AU Optronics Corp (友達光電), the world’s No. 3 liquid-crystal-display (LCD) panel supplier, is to begin test production on its 8.5G line in the third quarter, increasing its capacity by around 9 percent. South Korea’s LG Philips LCD Co, the world’s second-largest LCD maker after Samsung Electronics, planned to start mass production at an 8G line in the first half of this year, Ho said.
Chi Mei Optoelectronics Corp (奇美電子), the nation’s second-largest maker of LCDs, which originally planned to begin production at its 8.5G plant this year, is to stop mass production temporarily after being hit by the global economic downturn.
“Even though the recent influx of rush orders could help boost shipments, as panel prices are still low, panel makers may continue to operate at a loss for the whole year,” Ho said.
Ho said panel prices had fallen between 40 percent and 50 percent from last July. Although panel prices have stabilized recently and some have increased, they have only been able to rise above cash costs, she said, adding that the rebound was weak.
PIDA said that global LCD TV shipments would amount to some 115 million units this year, an increase of 14 percent from last year, but this is well below the long-term average growth rate of 20 percent.
“Sales of LCD TVs are the major indicator of when the panel industry will recover this year,” Ho said.
PIDA said that global LCD panel shipments would reach around 170 million units this year, down 5 percent from last year, while global notebook shipments are forecast to reach around 145 million units this year, an increase of 7 percent from last year.
Ho said the most popular notebooks this year would still be 14 and 15-inch models. Light-emitting diode (LED) notebooks accounted for about 10 percent of the entire notebook market last year and this number is expected to grow to 36 percent this year.