The global supply of LCD panels used in PC monitors and TVs will exceed demand next year and the situation will deteriorate further in 2015 as Chinese makers are boosting their capacities at full speed, local market researcher Topology Research Institute (拓墣產業) forecast yesterday.
Shipments from China are expected to grow 27 percent to 124.6 million units next year, primarily from BOE Technology Group Co (京東方) and China Star Optoelectronics Technology Co (華星光電), compared with 98 million units this year, Topology analyst Harrison Po (柏德葳) said.
China Star is expected to make 20 million units this year with its plants operating at full capacity, Po said.
Next year, PC and TV flat panels made in Chinese plants will account for 17 percent of global shipments, up from 13 percent this year, according to Po’s forecast.
The figure is to rise to 22 percent in 2015, after Chinese companies expand their total capacity to 159.7 million units, Po said.
However, overall demand for monitor and TV flat panels is expected to increase just 1.4 percent to 164.4 million square meters next year, from 162.1 million square meters this year, Po said.
“There will be no supply crunch [as happened this year],” Po said. “The supply glut will worsen in 2014 and panel makers have to offer cost-saving or innovative products to maintain their competitiveness.”
LOWER REVENUE
Oversupply will drive down panel prices and lower global revenue of PC and TV panels by 5 percent to US$87 billion next year from US$92 billion this year, according to Po’s projection.
To cope with growing competition from Chinese rivals and to avoid price erosion through oversupply, Taiwanese flat-panel makers are changing to making higher-margin ultra-high-resolution TV panels, or 4K panels, Po said.
“The 4K panel is one of the major products Taiwanese companies developed to survive and to make profits,” Po said.
Shipments of 4K TV panels are forecast to soar to 13.5 million units next year from this year’s 3 million units, mostly from Taiwan’s top LCD panel manufacturer, Innolux Corp (群創光電), he said.
PENETRATION RATE
That would boost the penetration rate of 4K TV sets to 5.7 percent next year from 1.3 percent this year, he said. Most 4K TVs would be 50-inch and bigger models, he added.
Po also warned that Chinese firms are catching up rapidly in developing touch panels and would cause a supply glut.
“In Shenzen alone, the number of small-and-medium-sized touch companies can go up to 200,” Po said.
The stock prices of Innolux and the nation’s No. 2 panel maker, AU Optronics Corp (友達光電), rose 0.38 percent and 1.41 percent to NT$13.35 and NT$10.8 respectively.
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