- Although the third quarter is traditionally the peak sales season for Taiwanese small and medium display panels, demand fell short of expectations in the third quarter of 2004. Total shipment volume of Taiwanese small and medium display panels amounted to 140 million units in the third quarter of 2004, registering 62% year-on-year growth, yet merely 3% sequentially.
Industrial-use and PDA panel shipment volume declined by 50% sequentially. Furthermore, handsets continued to flood channel inventories in China, resulting in lower orders for MSTN LCD (Monochrome SuperTwist Nematic Liquid Crystal Display) and OLED (Organic Light Emitting Diode) panel from Asia Pacific phone makers. Handset panels, which account for the bulk of Taiwanese small and medium display panel shipments, fell by nearly 10%. OLED panel shipments for handset sub displays dropped as much as 50%, due to CSTN (Color SuperTwist Nematic) makers' dramatic price reductions to secure contracts.
Third quarter shipment value of the Taiwanese small and medium display panel industry reached close to US$1.4 billion, posting a significant 164% year-on-year growth rate, and a 36% sequential rise, both percentages higher than that of the third quarter shipment volume. ASP (Average Selling Price) also climbed from second quarter's US$7.4 to US$9.8, posting sequential growth of 33%, 63% year-on-year. The upward shift in ASP in the third quarter was mainly due to changes in product mix and assembly levels.
In terms of product mix, lower-priced MSTN LCD shipments sank visibly in the third quarter, while CSTN LCD, a-Si TFT (Amorphous Silicon Thin Film-Transistor) LCD, and LTPS (Low Temperature Poly-Silicon) TFT LCD makers increased shipments in the mobile handset and digital still/video camera segments. Combined with the trend towards larger panel sizes, Taiwanese small and medium display panel value saw dramatic growth in the third quarter. Share held by CSTN LCD and a-Si TFT LCD modules continued to rise in the third quarter, bringing their respective ASP to US$9.7 and US$28.5, growing 6% and 12% sequentially.
In the fourth quarter, MSTN LCD panel shipment is expected to either stay flat or decline slightly, as inventory problems among Asia Pacific phone makers remains unsolved and the pointed trend towards color panels persists. However, international vendor increases in CSTN LCD and a-Si TFT LCD orders give hope for 6% sequential shipment growth in Taiwanese panel volume, 53% year-on-year. Annual shipment volume of Taiwanese small and medium display panels is anticipated to reach 536 million units, 62% higher than 2003.