Abstract
In 2006 the worldwide small and medium-sized FPD (Flat Panel Display) panel industry saw 11.9% year-on-year growth in shipment volume, but a 3.1% decline in shipment value, reflecting the intense price competition in 2006 due to problems with overcapacity. a-Si TFT-LCD has become the mainstream technology for small and medium-sized FPD panel, and the replacement of CSTN-LCD and MSTN-LCD by a-Si TFT-LCD will speed up over the next few years. Mobile phones are still the most important application for small and medium-sized FPD panel, accounting for over 47% of all small and medium-sized FPD panel shipments worldwide; this is also the market segment where competition is most intense. This report will provide an in-depth analysis of these trends, and give a detailed forecast for the overall small- and medium-sized TFT-LCD panel industry.
The Small and Medium-sized FPD Industry Phasing into the Growth Stage
Over the period 2006 -2011, the small and medium-sized FPD panel industry as a whole will be moving from the growth stage of the industry lifecycle into the maturity stage. Both shipment volume and shipment value growth rates are starting to slow; the shipment value CAGR for the industry as a whole during the period 2006 -2011 will be just 2.4%. In 2004 -2006, competition in the mainstream segments of the small and medium-sized FPD panel market has already become significantly more intense, with the larger manufacturers growing at the expense of the smaller firms. To survive and remain profitable, panel makers will need to focus on expanding their production capacity, achieving cost advantage, building strong customer relationships, and upgrading their design capabilities. a-Si TFT-LCD has been establishing itself as the new mainstream small and medium-sized FPD panel technology; MSTN-LCD and CSTN-LCD are rapidly losing their status as the dominant technologies. PM-OLED has not been able to compete effectively against LCD panel due to the high degree of overlap between PM-OLED panel applications and LCD applications; PM-OLED is still more expensive than LCD panel of the same size, the display performance of PM-OLED panel is not significantly better than that of LCD panel, and LCD panel is available in a wider range of sizes. As a result, PM-OLED growth has been disappointing. As AM-OLED panel makers and mobile phone manufacturers within their business group have begun to use AM-OLED panel for mobile phone displays, in an effort to stimulate more widespread adoption of this panel type. Overall, the global small and medium-sized FPD panel market is now entering a period of intense competition in which the less competitive firms will gradually be forced to withdraw from the market.
Development of Niche Markets Needed for Sustained Revenue Growth
The mobile phone display segment's share of total small and medium-sized FPD panel shipment volume is expected to continue to exceed 47%, while its share of shipment value will be close to 60% over 2006 and 2011. Mobile phone displays will thus maintain their status as the most important application for small and medium-sized FPD panel, and as the main focus of competition for panel makers. In reality, the mobile phone panel market is dominated by a handful of leading panel makers. Smaller panel manufacturers find it very difficult to secure contracts for mobile phone panel; when they do manage to secure such contracts, the profit margins are usually very thin. The high concentration ratio in this segment of the market is related to the dominance of the global mobile phone market by five leading brands. To secure contracts from these leading international vendors, panel makers need to possess very large production capacity, low production costs, and first-rate quality. Generally speaking, smaller panel makers are only likely to secure contracts to supply panel for value-line models, or small-volume orders for panel for the repair of older models. For both large and small panel makers, concentrating on the mobile phone panel segment means that the company's fortunes will become inextricably tied up with developments in the mobile phone market; the loss of one single customer could have a very serious impact on the panel maker's operational performance. Although the larger panel manufacturers continue to focus heavily on the mobile phone display panel market, with the global mobile phone market approaching saturation point, shipment growth in this market in the future will not be especially high. The price of mobile phones will continue to fall, and panel makers will find that their profit margins are being squeezed. Larger panel manufacturers will continue to devote significant resources to developing the mobile phone panel market due to the fact that the large contracts in this market can help them to maintain high production capacity utilization rates. Nevertheless, panel makers need to be on the lookout for other applications that offer the potential for more rapid shipment growth. Panel manufacturer can also collaborate with customers on the development of new products, such as the digital photo frame and e-book devices. Developing markets other than the mobile phone panel market will be the key to earnings growth.