Taiwanese small and medium display panel shipments totaled 514 million units in 2004, posting significant 55% growth from 2003. Shipment volume in the fourth quarter of 2004 alone reached 135 million units, registering slight sequential growth and a year-on-year growth rate close to 40%.

With increasing orders from brand-name mobile phone vendors such as Nokia, Motorola, and Siemens, shipments of first-tier STN LCD (SuperTwist Nematic Liquid Crystal Display) panel makers continued to climb in the fourth quarter, lifting the industry concentration notably. Second-tier STN LCD panel makers were able to recuperate orders after the relief of inventory pile-ups in the Chinese mobile handset market. Both MSTN (Monochrome SuperTwist Nematic) LCD and CSTN (Color SuperTwist Nematic) LCD panels registered sequential shipment growth in the fourth quarter of 2004, enabling STN LCD panels to regain hold of around 80% of total Taiwanese small and medium display panel shipments in the fourth quarter of 2004.

Shipments of LTPS TFT (Low Temperature Poly-Silicon Thin Film Transistor) LCD and OLED (Organic Light Emitting Diode) panels also recorded slight growth in the fourth quarter, as makers aggressively expanded their customer base and secured more orders. Nonetheless, their respective share still remained under 5%.

By contrast, although brand-name vendors continued to place orders with Taiwanese a-Si (Amorphous Silicon) TFT LCD panel makers after the holiday sales season, makers of major consumer electronics such as digital still camera, digital video camera, portable DVD (Digital Versatile Disc), and portable multimedia player, cut back orders as they neared the light retail season. Combined with meager demand for car TV and navigation systems, Taiwanese shipments of small and medium a-Si TFT LCD panels in the fourth quarter dropped to an all time low in 2004.

In the fourth quarter, alterations in the product mix and falling panel prices for all technology types led the Taiwanese small and medium display panel industry ASP (Average Selling Price) to slip 18.8% sequentially, from US$10.1 to US$8.2. Shipment value also declined, mainly because the share held by color panels fell to under 50%. The fourth quarter shipment value thus only reached US$1.1 billion, waning almost 20% sequentially.

Panel shipment for several mobile handset models is slated to begin in mid-January, while MP3 (MPEG Audio Layer 3) player makers are increasing orders placed with Taiwanese panel makers, and the demand for car TV and navigation systems is rebounding. Shipment volume in the first quarter of 2005 is thus expected to reach 134.8 million units, marking a slight sequential increase and a year-on-year growth rate in excess of 25%.

Looking toward 2005, Korean and Japanese STN LCD panel makers have been losing orders to Taiwanese makers, and the share held by a-Si TFT LCD panels in mobile phones is increasing. In addition, TFT LCD panel makers are shifting focus to small and medium display panel production, while OLED panel makers are endeavoring to develop new applications and customers as well as adding new production lines. Annual shipment volume of the Taiwanese small and medium display panel industry is consequently anticipated to reach over 540 million units in 2005, posting another historical high.

Market Intelligence Center, based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. https://mic.iii.org.tw/english