In the fourth quarter of 2004, Taiwanese large size TFT LCD (Thin-Film Transistor Liquid Crystal Display) panel prices fell due to oversupply. Coupled with the traditional peak sales effect, fourth quarter shipments reached a little over 17 million units, registering approximately 44% year-on-year growth, 21% sequentially. Despite the notable shipment growth, ASP (Average Selling Price) declined by around 21% sequentially, and shipment value experienced a 5% year-on-year decline to approximately US$2.7 million in the fourth quarter of 2004.

Notebook PC and LCD monitor applications continued to account for the bulk of the industry's shipments in the fourth quarter. As LCD panels make up 80% to 90% of the cost for LCD monitors, the steep fall in panel prices have consequently pushed down LCD monitor prices as well. Seasonal effects also helped to stimulate demand in the market, ramping up the sequential increase of monitor panel and notebook PC panel shipments to around 18% and 20% sequentially. Improved panel imaging performance and price reduction also boosted the Taiwanese LCD TV panel shipments significantly in the fourth quarter of 2004, achieving a sequential growth rate of 74% and shoving the share of LCD TV panel shipments three percentage points up sequentially to 10%.

15", 17", and 19" panels accounted for the majority of the Taiwanese LCD monitor panel shipments in the fourth quarter of 2004. However, the volume and share of 15" panels was further compressed by the substantial price fall of 17" panels. 17" LCD panels thus remained the mainstream specification in the fourth quarter, holding 58% of the total Taiwanese LCD monitor panel shipment volume. In addition, the share held by 19" panels was also bumped up to 14% in the fourth quarter, as the swift drop in panel prices lifted consumer acceptance for 19" LCD monitors. In terms of notebook PC panel shipments, the shares held by each screen size remained roughly the same as in the third quarter. 15.x" notebook PC panels continued to secure the largest share at around 60%, among which at least 35% is comprised of wide screen panels.

Looking towards the first quarter of 2005, the plague of panel oversupply is projected to continue as makers persist with the capacity expansion in existing facilities and in new sites, whereas the market will likely demonstrate less enthusiasm. Both AUO's sixth generation and Chi Mei's 5.5 generation LCD panel plants are slated to launch into mass production in the first quarter of 2005. Although makers expect their added production lines to post gains in the TV panel segment, development in this market is still questionable. As most new lines commence mass production by outputting 17" and 19" monitor panels in order to make adjustments before moving into the manufacturing of larger TV panels, the surplus of 17" panels is likely to further contract the already thin profit margin of panels under 17". The added supply of 19" monitor panels is apt to place weight on 19" panel prices as well. Thus, should the demand for LCD monitors stay flat, the increased panel supply will impose further pressure on the Taiwanese panel makers in the first quarter of 2005.

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