Increasing demand from China, especially for TVs, notebook PCs and monitors, has altered the seasonality of flat panel display shipments, according to industry analyst DisplaySearch, part of NPD Group.

Demand for LCD and plasma panels from North America and Europe typically is weighted most heavily towards the second half of the year, with the result that the second half typically accounts for at least 55% of annual demand. However, in its recently-released Quarterly Worldwide FPD Shipment and Forecast Report, DisplaySearch reports that shipments of large-area FPD (including TFT LCD and PDP) in the second half of 2010 will fall to 53%, from 58% in 2009 (Table 1).

“China is changing because of the world, the world is also changing because of China,” noted David Hsieh, Vice President of DisplaySearch and President for Greater China. “China’s influence on the FPD industry is changing the FPD cycle and reshaping the FPD supply chain, with increasing panel and product manufacturing shifting to China—creating fierce competition among Japan, Korea and Taiwanese panel suppliers to establish fabs. Together with different characteristics of FPD buying and consumer behavior, this shift makes China a land that is flooded with opportunities and risks.”

The demand for small and medium displays (less than 10” diagonal, including TFT LCD, OLED, EPD, STN LCD and LTPS LCD) shows the same shift in seasonality, with the second half decreasing to 54% of annual demand. China, as an emerging zone for applications like TVs, notebook PCs, monitors, e-books, mobile phones, digital still cameras and portable navigation devices, has started to alter the seasonality of panel demand, which will influence the whole FPD supply chain as well as the quarterly supply demand balance.

Table 1: FPD Demand Seasonality

Source: DisplaySearch Q4’09 Quarterly Worldwide FPD Shipment and Forecast Report

As a result of the economic recession, 2008 was a unique year: FPD demand for the second half of 2008 was even smaller than the first half. However, 2009 has demonstrated reverse seasonality, with strong second half demand, accounting for 56% of the annual demand.

In 2010, DisplaySearch forecasts the shift in seasonality will be caused by the following factors:

• The peak shopping seasons in China, such as Chinese New Year and Golden Week in May, are in the first half of the calendar year.
• To manage the supply demand cycle better, brands and OEMs are developing new strategies to pursue higher allocation in the first half to build inventories.
• FPD and component suppliers intend to better leverage their capacity and maintain a balanced utilization for a whole year for better cost effectiveness.
• More TV, PC and consumer electronics brands are emphasizing new models launched in the first half of the year, especially introducing new technologies, new designs and new platforms.

About this study

The DisplaySearch Quarterly Worldwide FPD Shipment and Forecast Report covers quarterly worldwide shipments of all major flat panel applications. With over 140 FPD producers across 10+ countries and authored by industry experts, the Quarterly Worldwide FPD Shipment and Forecast Report analyzes historical shipments and forecast projections to of these films.

About DisplaySearch

Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the $770 billion display supply chain, as well as the emerging photovoltaic/solar cell industries. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with the NPD Group, its parent company, DisplaySearch uniquely offers a true, end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels.

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