China's Large-size TFT Panel Market Report, 2009

Influenced by the stagnant consumer demand caused by the global financial crisis, the growth rate of the output of such terminal products as notebook PCs, LCD TVs and LCD monitors dramatically dropped in 2008, which also brought down the growth rate in the TFT-LCD panel market. In 2008, the China sales of the large-size TFT-LCD panels amounted to 215 million units, a year-on-year increase of 20.7%, a level lower than the high growth rate of 30.1% in 2007.

As a result of the strong terminal market demand, the LCD panel market witnessed an undersupply, accompanied by the rising price and the capacity expansion at some manufacturers, in 2007. Since the start of 2008, the entire unit manufacturers started to increase the stock in anticipation of the continuous prosperity of the downstream terminal market, which contributed to the thriving demand for the panels. However, since June of the year, the US subprime lending crisis ignited the global financial crisis, which has swept the entire world and seriously inhibited the consumer market demand. The LCD panel demand had accordingly contracted considerably, while the price once even approached the cost price. The global top LCD manufacturers have successively cut down their productions as a measure to respond to the crisis.

Notebooks, LCD monitors and LCD TVs constitute the three major consumers of the large-size TFT-LCD panels. In 2008, the LCD panel sales in these three areas hit 210 million units, 98.1% of the overall LCD market. The application of the LCD panels mainly focused on such emerging products as digital frames, which took a much smaller market share.

As driven by the growing consumer demand for the multimedia entertainment functions, going to widescreen continued as the trend of the TFT-LCD panel product structure in 2008. Therefore, the panel manufacturers shifted to the production of the panels for widescreen monitors and widescreen notebooks, leading to a remarkable expansion of the product lines.

As an industry intensive both in fund and technology, the panel industry involves a high access threshold and relative monopoly. The world top five panel manufacturers - Samsung, LGD, AUO, Chi Mei and Chunghwa Picture Tubes - capture the majority of the large-size TFT-LCD panel market. Based on the current industrial landscape, the situation that the key manufacturers dominate the market will not change much in the short term.

In 2009, the China large-size TFT-LCD panel market will witness a basic balance between supply and demand, and the further growth slowdown. On the side of the application structure, LCD TVs, notebook computers and LCD monitors will continue taking an absolute market share; on the side of the product structure, the trend to large size and widescreen will not change; and on the side of the competitive landscape, the world top five panel manufacturers will continue dominating the market.