AUSTIN, USA: In November, shipments of large-area TFT LCD panels reached the lowest level since May 2007, according to the DisplaySearch Monthly TFT LCD Shipment Database.

Specifically, shipments were 28.5 million units, down 21 percent M/M and 25 percent Y/Y. November revenue for large-area TFT LCD panels fell to $3.8 billion, down 24 percent M/M and 50 percent Y/Y, the lowest level since July 2006.

DisplaySearch also found that panel demand has weakened significantly in all three of the major TFT LCD applications: notebook PCs, monitors and TVs, and panel suppliers have reduced capacity utilization. Notebook PC panel shipments were 8.5 million, down 25 percent M/M and 23 percent Y/Y, which is the lowest level since May 2007.

Monitor panel shipments were 10.9 million, down 22 percent M/M and 33 percent Y/Y, which is the lowest level since June 2006. TV panel shipments were 8 million, down 17 percent M/M and 16 percent Y/Y, which is the lowest since September 2007.

Table 1: Monthly Large-Area TFT-LCD Panel Shipments by Application (millions)

Source: DisplaySearch November 2008 Monthly TFT LCD Shipment Database

A combination of slow demand, the tendency of leading brands to favor internal sources of supply, and depreciation of the Korean won has disadvantaged Taiwanese panel suppliers, leading to loss of market share. As Table 2 shows, Korean suppliers had more than half the market share in November, a dramatic increase over just two months earlier.

Table 2: Large-Area TFT LCD Regional Unit Market Share

Source: DisplaySearch November 2008 Monthly TFT LCD Shipment Database

In November, LG Display was the leader in units shipped, with 26 percent market share, while Samsung led in area with 29.4 percent. Both shares are the highest level for the leading suppliers in four years.

In terms of application market share, LG Display led in notebook with 33.3 percent unit share, followed by Samsung at 28.2 percent and AUO at 21.6 percent, respectively. Samsung led in monitor with 22.2 percent unit share, followed by LG Display at 21.9 percent and AUO at 15.1 percent. Samsung led in the TV with 27.9 percent unit share, followed by LG Display at 26.2 percent and Sharp at 17 percent.

Weak demand is also impacting shipments of small/medium TFT LCDs. DisplaySearch’s report indicates that November shipments from Korean and Taiwanese suppliers fell to 41.3 million units, down 44 percent M/M and 39 percent Y/Y, which is the lowest level since May 2007. Meanwhile, small/medium TFT LCD revenues for Taiwanese and Korean suppliers fell to $337 million, down 42 percent M/M and 51 percent Y/Y, which is the lowest level since April 2007.

According to David Hsieh, Vice President of DisplaySearch: “The TFT LCD industry is going through the hardest time in a decade, as shipments and revenues dramatically decline. To cope with the weak demand, capacity utilization for Taiwanese panel manufacturers is below 60 percent, Korean manufacturers are reducing utilization to less than 80 percent, and Japanese manufacturers are re-adjusting fab allocations.”

Hsieh added: “Currently, most panel prices are below cash cost, and some lower than the BOM cost. However, the biggest challenge may be in Q1’09, since downstream demand is unclear as long as panel prices continue to fall.”

Hsieh concluded: “The industry will need to take additional steps to reduce capacity utilization, since falling panel prices are not stimulating demand under the current economic conditions. Continuing to reduce panel prices will cause continued pain for the whole supply chain, including panel makers, materials makers and set makers.”