- In the third quarter of 2004, due to inventory pile-ups from the second quarter and lower sales performance in the LCD TV and LCD monitor segment, the Taiwanese large size TFT LCD (Thin-Film Transistor Liquid Crystal Display) panel industry experienced a slight 5.3% sequential decline in shipment volume, and a 39% year-on-year growth rate, to reach approximately 14.1 million units.
Impacted by oversupply, the industry's ASP (Average Selling Price) also dropped 23% sequentially to US$203. Shipment value only reached around US$2.8 billion in the third quarter, posting a 27.3% decline from the second quarter, and 34.3% year-on-year growth. This is the first time in three quarters that the industry's shipment value registered a year-on-year growth rate under 100%.
Notebook PC and LCD monitor applications continued to account for over 90% of the industry's shipment share in the third quarter, while shipment volume and share of LCD TV applications stood at roughly the same level as in the second quarter. LCD TV panel volume totaled 950,000 units in the third quarter, accounting for 7% of shipments.
Influenced by high inventory levels from the second quarter and flat third quarter demand, LCD monitor panel shipments reached only 8.9 million units in the third quarter of 2004, down 8% sequentially, and marking the application's first negative growth rate since the third quarter of 2002. By contrast, notebook PC panel shipments were aided by back-to-school sales and the reflection of panel cost drop on retail prices. In the third quarter of 2004, notebook PC panel shipments increased 11% sequentially, and around 35% year-on-year, to 4.2 million units.
17" LCD monitor panel price declines in the third quarter boosted the shipment share of 17" panels to 54%, whereas the limited price difference between 15" and 17" LCD monitor panels compressed the shipment share of 15" panels. 19" LCD monitor panel shipment volume and share both dropped slightly due to slow inventory digestion from second quarter replenishments.
In notebook PC panel shipments, 15" LCD panel prices have dropped to or even below the level of 14.1" panels, bringing 15" panels to account for almost 60% of all Taiwanese notebook PC panel shipments in the third quarter. Price declines for 15.4" wide screen panels have slowed, however, the third quarter peak sales season in the consumer market still gave rise to the shipment volume of 15.4" wide-screen LCD panels, which are mainly targeted at the consumer market.
Looking towards the fourth quarter of 2004, as fifth generation LCD panel plants continue to up their yield rate and capacity, a more severe case of oversupply will result. Whether or not the price cut of LCD monitor and LCD TV panels will stimulate enough demand to offset the pressure from oversupply will largely determine the industry's performance in the fourth quarter of 2004.