Why bigger is better for FPD recovery and growth

October 24, 2012 - Several trends are helping to steer the flat-panel display industry back on the road to recovery, despite excess capacity and eroding prices (and profits). One is the commercialization of advanced technologies and specifications (e.g. higher resolution, wider viewing angels, integrated touch functionality, and slimmer/lighter formfactors). The other is a shift toward larger panel sizes.

“The average diagonal sizes of key FPD applications have increased over the past three years, and every inch of growth in flat panel display applications results in growth in area demand and thus capacity utilization,” points out David Hsieh, VP of Greater China Market Research for NPD DisplaySearch. Consumers won’t want to go back to smaller displays and lower resolutions, so average (diagonal) sizes will accelerate in 2013, spurring long-term growth for the entire flat-panel display industry. DisplaySearch notes that LCD TV panel sizes have increased 2 inches in just the past 12 months (August 2011-August 2012), from 34.8-in. to 36.8-in.. Sharp, which has the highest average screen size of TV panels shipped, has added nearly 10-in. to its panels (39.1-in. to 48.3 in). Given a total typical 18-20M panel shipments/month, those extra sizes add up quickly.

Here’s DisplaySearch’s tracking of multiple key FPD applications and their size differences over a four-year period. Note mobile PCs are actually seeing smaller screen sizes thanks to the rise of tablets and ultrabooks. The firm also notes "challenges" for desktop panels in 2012-2013 as due to PC bundles and fewer standalone PC replacements, though consumers are splurging on bigger LCD monitors (23-in. to 27-in.).

Average diagonal size of key FPD applications, in inches. (Source: NPD DisplaySearch)

What’s behind the increase in screen sizes? Consumers, given the choice, are choosing bigger: 26W to 29 W, 37W to 39W, 46/47 to 50-in, 55 to 60-in. That includes when they upgrade older LCD TVs. Consumers in North America have been upgrading their living room sets from 40-in. to 50-in. or bigger, and from 32-in. to 39-40 in the bedroom, DisplaySearch notes. And for TV firms, larger-sized TVs mean bigger profit margins.

DisplaySearch says to watch for some major holiday promotions around bigger LCD TVs. (Rumor has it there’ll be a Black Friday deal of $999 for a 60-in. LCD TV.) This should keep whetting consumers’ appetites to keep migrating to bigger screens, perpetuating the trend of making the bigger panels.

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