There is a good chance for Taiwanese LCD panel makers to return to the black next quarter, because recovering demand for TV panels will help end prolonged oversupply and trigger a round of price rebounds, market researcher NPD DisplaySearch forecast yesterday.
Supply has also decreased as LCD panel makers shift production to high-resolution OLED screens for smartphones and TVs, which has limited output of TV panels because of a relatively lower yield rate, NPD DisplaySearch vice president David Hsieh (謝勤益) told reporters.
“We are optimistic about the second and the third quarters ... We are seeing supply of TV panels becoming tight recently,” Hsieh said. “A lot of TV brands started placing orders to build inventory for the second half [shopping season] ahead of schedule, before panel prices go even higher.”
Some companies have already started negotiating with panel -suppliers for a deal in preparation for “Black Friday” sales, rather than booking in June or July, he said.
Black Friday is the day following Thanksgiving in the US, traditionally the beginning of the Christmas shopping season.
On top of that, TV sales in China during the Labor Day holidays beginning on May 1 are expected to grow at a resilient 10 percent annual rate this year, Hsieh forecast.
Because the oversupply problem is improving, panel prices are expected to rise at a 2 percent or 3 percent monthly pace from this month through the third quarter, during which demand is expected to exceed supply more severely than this current quarter, he said.
The price increase would bring local panel companies’ net profit margin back into positive territory, or less than 5 percent, for the first time in eight quarters, he added.
DisplaySearch said supply of certain screens, including mainstream 32-inch panels, 40-inch, 42-inch and 46-inch panels, had become tight. Supply constraint was even marked for newly developed 39-inch TV screens, because many TV brands are following Haier Group (海爾) in launching 39-inch TV sets after Haier’s TV sets eroded sales of 37-inch TVs in North America, the researcher added.
Separately, Hsieh said Apple Inc would likely use new touch panels for its new iPhone, which could be unveiled in the fall, to reduce the thickness and weight of the new smartphone.
The adoption of in-cell touch panels could, to some extent, erode the businesses of Apple’s local touch-panel suppliers, including TPK Holding Co Ltd (宸鴻) and Wintek Corp (勝華), while boosting Japanese panel suppliers, such as Sony Corp, Sharp Corp and Toshiba Corp, Hsieh said.
Japanese companies led -rivals in Taiwan and South Korea in developing new touch panels by fabricating touch sensors with thin-film-transistor arrays, rather than adding sensors to the top of an LCD glass substrate, he said.
TPK and Wintek currently supply Apple with thicker touch panels made with the conventional on-cell technology for iPhones and iPads.
Meanwhile, Chinese LCD panel makers are expected to seize a 20 percent share of the global LCD panel market in 2014, up from this year’s 10 percent, while Taiwanese companies would see their share fall to 28 percent from 32 percent this year, the researcher’s tallies showed.
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