June 7, 2012 — Chinese suppliers of large-size liquid crystal display (LCD) panels are the fastest growing segment of the industry, although major South Korean brands continue to dominate, according to a new IHS iSuppli LCD Market Tracker report.
Table. Global large-size LCD panel market share (shipment volumes). SOURCE: IHS iSuppli Research, May 2012.
|Rank||Company||HQ||Q1 2012 shipments (thousands of units)||Q1 2012 market share (%)||Q4 2011 shipments (thousands of units)||Q4 2011 market share (%)||Q/Q growth (%)|
|1||LG Display||South Korea||44535.6||28.1||44287.4||27.0||0.6|
Chinese panel suppliers capitalized on rising production and strong domestic demand for 32” TVs. #5 Beijing Optoelectronics Technology Co. Ltd. (BOE) of China achieved first-quarter shipment growth of 18.6%, the best performance among the Top 10 suppliers. #7 player Infovision Optoelectronics Co. Ltd. (IVO), also of China, increased its own shipments by a slightly smaller 18.3%, the second-best results for the Top 10.
However, it was two newer Chinese entrants that were not ranked among the Top 10 that saw the most explosive growth in the first quarter. CEC achieved a 63.5% expansion, while China Star Optoelectronics Technology more than doubled its shipments with a 103.3% increase, by far the largest growth in the market.
“The Chinese players are cashing in on the country’s fast-growing demand for 32-inch panels used in televisions,” said Sweta Dash, senior director for liquid crystal displays at IHS. “Meanwhile, the Chinese suppliers are ramping up production, allowing them to expand shipments at a fast pace. Both BOE and China Star have new 8.5-generation fabs, which will allow them to compete with other suppliers that possess similar next-generation fabrication facilities, especially in the television market. The Chinese manufacturers also are benefiting from new tariffs levied by their government, which are creating challenges for their overseas competitors.”
The table below shows the latest Top 10 rankings in the global large-sized LCD space, with market share listings based on unit shipments in the first quarter of 2012 compared to the fourth quarter of 2011. Large-sized LCD panels are defined as those with a diagonal dimension larger than 10 inches.
China’s tariffs in April increased to 5% for imports of LCD panels sized 32” and larger, up from 3% before. The higher tariff has the potential to erode the market share of Taiwanese suppliers, because they now have such a large market share in China.
With overall opportunities tightening in the mature large-sized LCD panel market, partly because of the rising tariffs and increased competition from China, established suppliers based outside China are in the process of figuring out their strategies to outmaneuver the competition. Some are focusing on value-added or more differentiated products, such as high-resolution or 3D panels, while others are moving into new TV panel sizes like 39” or 50”. While the Chinese players focus on the 32” panel market, Taiwanese suppliers prefer to supply the most efficient panels that could be made in older Gen 7.5 fabs to avoid direct competition with their mainland rivals.
While the Chinese were foremost in terms of growth, the South Korean suppliers — LG Display Co. and Samsung Electronics Co. Ltd. — continued to lead overall market share in the large-sized LCD panel business. Together the two South Korean electronic titans dwarfed all other players in the first quarter, accounting for 50.9% — slightly more than half — of global shipments for large-sized LCD shipments. The remaining 49.1% of the market was held by 15 players — six from Japan, five from China and four from Taiwan. The Taiwanese, despite having fewer players, held larger shares individually and collectively than their Chinese and Japanese rivals.
LG Display Co. continued to speed ahead of archrival Samsung Electronics Co. Ltd. as it widened its overall share in the large-sized liquid crystal display (LCD) panel market during the first quarter this year. This was due in part to LG profiting from the quarterly loss in shipments by other suppliers.
With shipments of 44.5 million large-sized LCD panels in the first quarter, LG accounted for a huge 28.1% of the market and was the undisputed leader in the space. LG’s performance handily beat out Samsung’s shipments during the same period of 36.2 million units, allowing Samsung to retain the runner-up position with a 22.8% market share.
For the first quarter, LG managed to actually expand shipments by 0.6% from a 27.0% share in the fourth quarter. In comparison, Samsung saw 7.6% of its shipments vanish from the fourth quarter, when it held 23.9% of the market.
The 8% decline in shipments at Samsung may have been caused by various factors, including a diminished customer base in China, the break-up of its LCD joint venture with Japan’s Sony Corp., and the decision by Samsung to focus more on high-end LCD segments in order to improve profitability. The decline in shipments during the period by the #3 player, Chimei Innolux Corp. of Taiwan, also helped LG to secure a bigger share.
Total large-sized LCD shipments worldwide amounted to 158.6 million units in the first quarter, down 3.3% from 169.3 million units in the fourth quarter but up 1% compared to the first quarter a year ago.
Part of the reason for the overwhelming dominance of the South Koreans was that both LG and Samsung supplied panels internally for their own divisions that make televisions, in addition to partnerships with other TV brands. Such vertical integration was missing in many other players, which could only supply panels to outside clients and had no captive internal markets of their own.
Among other large-sized LCD suppliers, both Chunghwa Picture Tubes Ltd. and HannStar Display Corp. from Taiwan are moving away from the mature large-panel market to the small- and medium-sized LCD space, or even into panels for the touch screen industry, where greater opportunities are springing up given the increasing proliferation of tablets and smartphones. HannStar was the only company to fall out of the Top 10 in the first quarter, allowing previous 11th-place holder Tianma of China to take its spot.
Read more in IHS’s Recovery Expected in Large LCD Market in 2012 After a Very Slow 2011
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