Press Room
The Taiwanese LCD TV Industry, 1Q 2006
March 17, 2006

According to Market Intelligence Center (MIC), in the fourth quarter of 2005, panel prices continued to drop, also bringing down LCD (Liquid Crystal Display) TV prices, as new large-size panel production lines were coming online and as yield rate of these lines improved. Furthermore, replacement demand in Europe and the United States was stimulated by the Christmas holiday season, and major European and US vendors and channel players continued to place orders with Taiwanese LCD TV makers. Shipment volume of the Taiwanese LCD TV industry reached approximately 1.7 million units in the fourth quarter, for year-on-year growth of 190%, and 21% sequential growth.

Decline in panel prices brought down prices of LCD TVs in the fourth quarter. However, shipment volume of 26-inch and larger living-room models recorded strong growth, and the shipment share of high-ASP (Average Selling Price) digital LCD TVs also increased considerably. This enabled the industry's ASP to hit US$580, up 11% sequentially. Due to the steady growth of large-sized high-end models, shipment value of the Taiwanese LCD TV industry reached about US$960 million in the fourth quarter, up 207% year-on-year and 34% sequentially.

Looking at product mix, 20-, 23-, 26-/27-, 32- and 40-inch models recorded relatively strong growth in shipment volume in the fourth quarter, with their combined shipment share topping 80%. Overall, most 20-inch and larger LCD TVs experienced large year-on-year and sequential growth, except 30- and 21-inch models. Due to the suspension of the production of 30-inch panels by some suppliers, shipment volume of 30-inch LCD TVs fell 61% sequentially, while 21-inch models suffered a 27% sequential decline because of unclear market positioning.

In the first half of 2006, price competition between major international vendors is expected to heat up, making it likely that LCD TV prices will continue to drop, stimulating demand in the end-market. Having strong cost management capabilities, Taiwanese LCD TV makers are expected to have an advantage in obtaining orders. In addition, in 2006 the Olympic Winter Games in February and the soccer World Cup in June were expected to push global demand for LCD TVs to a new high. Furthermore, in the first half of 2006 next-generation panel plants of the two major Korean panel makers will enter mass production, which will inevitably trigger further price falls of panels. The Taiwanese industry, which currently has a share of the worldwide shipment volume of about 30%, is expected to benefit from these developments.

ASP of all panel sizes is expected to continue to drop in the first half of 2006. However, the mainstream size of LCD TVs will move up from 32-inch to 37-inch and larger models, and HD TVs (High Definition TVs) will also become mainstream products. Costs of producing these new mainstream models are expected to be reflected in only a limited decline in LCD TV ASP of Taiwanese makers.

Due to the replacement effect posed by multi-function LCD monitors, shipment volume of 20-inch and smaller LCD TVs is forecasted to continue its decline in 2006. LCD TVs ranging from 20- to 27-inch are expected to switch from living-room TVs to study room or personal TVs, and will maintain steady growth. Price competition for 32-inch LCD TVs is expected to continue into the first half of 2006 and extend to 37-inch and larger models as well. It is anticipated that in the first half of 2006, 37-, 40-, and 42- LCD TVs will experience significant growth. Due to their prices, 45-inch and larger models will only record slight growth in shipment volume in the first half of 2006, and are not forecasted to see considerable growth until late 2006 or 2007.

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About MIC

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.