Market Watch

Small- and Medium-Sized Display Market Slowed in December


SMD panel suppliers contend with manufacturing issues for larger, higher-resolution displays

Shipments of small- and medium display panels used in devices like smartphones and tablets dipped slightly in the final month of 2012, waning as the holiday season for gadget-loving consumers in the Western world came to a close, according to the IHS iSuppli Small and Medium Display (SMD) PriceTrak report from information and analytics provider IHS.

SMD shipments from Taiwan and South Korea amounted to 202.6 million units in December, down for the second straight month from October. The same trend of declining SMD panel shipments glimpsed this year was also present in 2011 when December shipments at that time fell to 198.6 million units, down from their November and October 2011 levels.

Overall, the month of December marks the beginning of the seasonal reduction in demand for SMDs as manufacturers decrease orders after the holiday buying spree ends for consumers in North America, Europe and other markets in the West. This year’s decrease could have been steeper, had it not been for a few liquid crystal display (LCD) suppliers that channeled some of the dropped production to the Lunar New Year instead, which occurs in January or February.   

In response to demand from China, suppliers like Chunghwa Picture Tubes (CPT) and HannStar Display—both based in Taiwan—increased capacity allocation in December to SMD panels, defined as those sized from 5- to under 10-inches.

A monthly increase in shipments from CPT and HannStar lifted the Taiwanese total for the month to 155.6 million units, up 0.1 percent from November. The marginal uptick—as well as production from four other Taiwanese SMD panel suppliers—helped counter a 6 percent decline in monthly shipments from the rival Korean contingent of Samsung Display and LG Display, down to 47.0 million units.

New large and high-resolution displays present challenges in panel production

In response to newer smartphone designs, SMD panel suppliers are providing larger display options, expanded sizes and higher-resolution options for their handset and tablet display road maps. But the manufacturing of displays boasting higher pixels-per-inch in resolution, as well as the jump in sizes, imparted new challenges.

Suppliers were affected, for instance, by low yields during initial production of the high-end displays, especially those that featured innovative technologies like in-cell touch and oxide silicon (o-Si). Moreover, an increased demand in displays for the smartphone and tablet markets brought about the need for more panels featuring wide-viewing angle (WVA) technologies such as AH-IPS, HFFS, S-LCD 3 and PLS—a market populated by only a few patented suppliers.

On the positive side, however, the production of large-area displays allowed suppliers to better manage fab capacities. Producing large-area displays increases display glass consumption at supplier fabs. Larger and higher-resolution displays also carry loftier pricing compared to low-end and non-premium displays, providing suppliers with increased revenue opportunities. LCD suppliers that have mastered in-cell touch and o-Si technologies can likewise differentiate themselves from other panel producers, offering handset and tablet device makers with alternative—but still competitively priced—panel options.

As the display market moves to higher-resolution SMD applications, o-Si LCDs provide an alternative technology option. Aside from the thinner form factor, o-Si LCD displays also offer increased power efficiency as well as higher electron speeds compared to amorphous-silicon LCD technology.

The performance of o-Si LCD displays and their potential for greater availability could likely provide a growing market for o-Si LCDs in the SMD market, IHS iSuppli believes.

Read More >> SMD Demand Begins to Wane in the Wake of Western Holidays