Growing demand for ultra-high definition (HD) 4K televisions will likely benefit Taiwanese suppliers of the chips that control LCD flat-panel displays, according to Morgan Stanley.
Morgan Stanley said the market still views 4K TVs as a niche product due to high prices and a lack of content broadcast in ultra-HD.
Despite that, the brokerage forecast 4K TV penetration would reach 25 percent next year and 40 percent in 2016 as it expects 4K TV prices to fall to about US$668 on average in 2016 from US$999, thanks to makers’ improving yields and competition between TV brands.
The development of 4K content and video streaming is also expected to be driven by more 4K broadcasting by operators in the US, China, South Korea and Japan, the brokerage said in a client note on Thursday last week.
“We believe LCD driver integrated circuit [IC] vendors in Taiwan are best positioned to leverage the 4K2K TV demand upside,” Morgan Stanley said.
Its top stock preference was Chipbond Technology Corp (頎邦), followed by Novatek Microelectronics Corp (聯詠) and ChipMos Technologies Ltd (南茂).
Analysts expect potential beneficiaries in the panel, wafer foundry, TV chipset and DRAM sectors, including flat-panel maker AU Optronics Corp (AUO, 友達) and memorychip maker Winbond Electronics Corp (華邦).
Both AUO and Innolux Corp (群創) are forecast to lead global shipments of 4K panels this year, accounting for a combined 58 percent share of the global market, according to market intelligence firm NPD DisplaySearch.