LG.Philips, Samsung dominate large-sized LCD panel market
LG.Philips LCD Co. Ltd topped the market for large-sized LCD panels in Q1 in terms of unit shipments, according to a preliminary estimate from iSuppli Corp. Meanwhile, Samsung Electronics Co. Ltd ranked first in the market in terms of revenue.
South Korea's LG.Philips shipped 16.6 million large-sized LCD panels, up 1 percent from 16.4 million in Q4 2006. LG.Philips outperformed the overall large-sized LCD panel market, which contracted by 4.5 percent to 77.5 million units, down from 81.2 million units in Q4, reports iSuppli. This boosted LG.Philips' share of global shipments, which reached 21.4 percent in Q1, up from 20.2 percent in Q4.
"LG.Philips deftly managed the seasonal downturn in Q1," said Sweta Dash, director, LCD and projection research for iSuppli. "The company reported its panel shipments measured in terms of square meters decreased by only 1 percent sequentially in Q1. Beyond that, LG.Philips' finished-goods inventory decreased to only two weeks at the end of Q1, down from three weeks at the end of Q4 2006."
With its above-average growth in panel shipments in Q1, LG.Philips ranked first for the first time since Q2 2005. This caused AU Optronics Corp. (AUO) to fall to second place, down from the top position it achieved in Q4 2006 following its merger with Quanta.
AUO's shipments declined at a similar rate as the industry average, decreasing by 4.1 percent to 15.9 million units, down from 16.6 million in Q4 2006. According to iSuppli, the company gained fractional market share, with its slice of the market rising to 20.6 percent, up from 20.5 percent in Q4.
AUO reported it had 49 inventory turnover days at the end of Q1, up from 44 days at the end of Q4 2006. Causing the stockpile surge was the company's increasing product shipments by sea, rather than air, which results in slow deliveries, said the company.
Meanwhile, Samsung underperformed the market with its shipments declining by 4.6 percent to 14.8 million units, down from 15.6 million in Q4. Although Samsung maintained its third-place position in the market, its share of global unit shipments downgraded to 19.1 percent in Q1, down from 19.2 percent in Q4 2006.
"Samsung has chosen to focus more on larger-size panels, such as 40-inch and bigger in the TV market and 20-inch and bigger wide-format products in the monitor market," Dash said. "This caused the company's unit production to be lower than it would be otherwise." This strategy of focusing on large-sized panels enabled the company to rank first in the market in terms of revenue, according to iSuppli.
Table 1 shows iSuppli's preliminary ranking of the top large-sized LCD panel suppliers in Q1 2007.
Although Q1 was weak compared to the peak selling season in Q4 2006, sales growth was strong on a year-over-year basis. Global large-sized panel shipments in Q1 2007 went up by 25 percent compared to 61.8 million from a year-ago period. Amid slow sales and oversupply conditions in Q1, panel suppliers cut their utilization rates in January and February. However, by March, most of the fifth-generation fabs were running at full capacity. LG.Philips reported a 90 percent utilization rate in Q1, while AUO reported 80 percent.
Although Q2 is generally considered to be a slow season for the large-sized LCD panel market, demand is expected pick up during the period, according to Dash.
"The LCD panel market typically enjoys stronger conditions in the third and fourth quarters, after a slow first half," Dash said. "However, this year, the recovery is expected to start earlier, commencing in Q2." Panel buyers now are accelerating their orders to prepare for a stronger Q3, as well as to replenish presently low inventories in the supply chain. This is aiding the market recovery, Dash observed. Rising end demand for these panels is caused by the mobile PC and desktop PC monitor markets, as well as by an early pick up in the LCD TV segment.
For 2007, large-sized LCD panel shipments are forecasted to grow to over 350 million units, up 24 percent from 281.4 million units in 2006, according to Dash.
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