USA: The global market for large-sized LCD panels appears to be shrugging off economic concerns this year, with rising demand for monitor, notebook-PC and TV panels likely to generate a 17.7 percent increase in unit shipments in 2008, iSuppli Corp. predicts.

iSuppli defines large-sized LCD panels as those having a diagonal dimension of 10-inches or larger.

"The market for large-sized LCD panels struggled with an oversupply situation starting in November and into the first quarter of 2008," said Sweta Dash, director, LCD, for iSuppli. "However, concern over expected tight supplies in the second and third quarters due to Summer Olympic Games related demand and slower capacity expansion plans is prompting buyers of large-sized LCD panels to pull in their orders earlier and to maintain high inventory levels—a marked contrast from late 2007."

iSuppli boosts 2007 forecast
Large-sized LCD panel shipments in 2008 are projected to rise to 458.9 million units, up 17.7 percent from 389.8 million in 2007. This compares to 38.9 percent growth in 2007.

The large-sized LCD panel market is expected to reach 737.6 million units by 2012, expanding at a CAGR of 13.6 percent from 2007. iSuppli's revenue forecasts for 2008 and future years have been increased to reflect greater investments and higher capacity that will drive future growth.

The global large-sized LCD market will expand to $88.9 billion in 2008, up 19.9 percent from $74.1 billion in 2007. The fact that revenue will grow more quickly than unit shipments in 2008 reflects stronger ASPs for large LCDs due to supply constraints. Large-sized TFT-LCD panel revenue is expected to reach $120.7 billion in 2012, maintaining a CAGR of 10.2 percent from 74.1 billion in 2007.

A surprisingly strong Q1
Many were concerned about the large-sized LCD panel market in 2008, mostly due to the slowdown in the U.S. and other worldwide economies. However, shipments of large-sized LCD panels in the first quarter of 2008 declined by only 2.8 percent compared to the fourth quarter of 2007. Generally, the first quarter is seasonally slow, but this year, even after negative growth in January and February, first-quarter shipments recovered somewhat due to strong growth in March.

Most panel buyers are expecting the LCD market to be in tight supply in the second and third quarters due to the Olympics and slower capacity expansions in the first half of 2008.

So, although the end-system market remains slow due to the general deceleration in the U.S. and the worldwide economy, the panel market is growing at a faster rate. Notably, first-quarter panel shipments fell 5.3 percent compared to the fourth quarter. With the strong pickup in sales in the first quarter, shipments increased 40.1 percent compared to the same period in 2007.

Demand hangs tough
While the supply glut did continue in the first quarter, the strong demand for monitor, television and notebook PC panels has begun boosting the large-sized LCD market, a phenomenon expected to continue through the third quarter.

Panel suppliers are expected to spend about $17 billion in 2008 alone to increase their capacity at higher-generation fabs. Strong growth in all three major application markets—TVs, notebooks and monitors—will propel large-sized LCD revenue into the future.