SANTA CLARA, CA – Shipments of large-area TFT LCD panels increased to 180.8 million units in the second quarter, up 11% sequentially and 6% year-over-year.
Revenues reached $19.3 billion, also up 11% sequentially, but down 16% year-over-year, says DisplaySearch.

Panel makers are targeting a modest 7% growth in shipments for the third quarter, as downstream manufacturers and brands are expected to prepare for the holiday season. However, fourth-quarter growth is expected to be flat.

“The TFT LCD industry has been in oversupply for more than a year, and first-quarter 2011 was at the bottom of the cycle. Prices rebounded slightly in the second quarter, and both shipments and revenues increased. However, this was just a short-term rebound, as stagnant economic conditions and low consumer confidence continue to exert a drag on demand, especially for IT products and TVs,” noted David Hsieh, vice president, greater China market, DisplaySearch. “Panel makers did not achieve their goal of growing second-quarter shipments 18% sequentially, and slow demand is eroding panel prices in the third quarter.”

Most LCD TV set makers are reducing 2011 panel demand forecasts to trim costs and maintain low inventory levels, says the research firm. Panel prices are becoming more negotiable as a result of the concern over weakening demand, and falling prices will encourage panel makers to cut capacity utilization in the second half of 2011. This is likely to persuade panel makers to set conservative shipment targets. This is abnormal for second-half shipment targets, which typically aim for strong growth, says DisplaySearch.

In the second quarter, all applications experienced sequential growth, and tablet PCs showed the strongest momentum, with 88% growth sequentially and 386% year-over-year. Monitor and notebook PC shipments grew 3% and 5% sequentially, respectively, but both were flat compared to the same period last year.
TV panel shipments were flat in the second quarter, while tablet and mini-note PC panel shipments fell 7% sequentially. Despite 7% sequential growth, TV panel shipments suffered a 4% year-over-year decline.

The decrease in panel prices at the end of July and beginning of August has caused panel makers to become concerned about second-half conditions.
In terms of revenues, all applications experienced sequential growth in the second-quarter, due to stabilized panel pricing. Tablet PC and public display panel revenues showed the strongest growth, at 64% and 28% sequentially, respectively. However, year-over-year revenue growth for monitor, notebook PC and TV panels were all negative. Due to an increase in shipments, panel makers are targeting 11% growth in revenues in the third quarter.

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