LCD market to be driven by increased consumer demand

By Sweta Dash [iSuppli/Stanford Resources]

Posted on 21 Jul 2003 at 10:28

Defying continued global economic sluggishness, the LCD market grew strongly during the first six months of 2003, with revenue rising to $13.7 billion, up 6.9 per cent from $12.9 billion during the same period in 2002. Growth will accelerate in the second half, with revenue rising 16.7 per cent compared to 2002 to $16.8 billion. Total LCD revenues will reach more than $30.5 billion for the full year of 2003, up 12 per cent from $27.3 billion in 2002.

The figure are iSuppli/Stanford Resources quarterly LCD panel revenue estimates for 2002 and 2003.

First-half growth largely was driven by an increase in demand for desktop PC monitors, notebook displays and LCD televisions, combined with a rise in panel prices. Prices were boosted by a tight supply of large-sized TFT LCD panels and by increasing demand for color displays from the cell phone market.

Second-half growth will be driven by an overall increase in demand, spurred by reduced panel prices and a rise in corporate and consumer sales, iSuppli/Stanford Resources predicts. Revenue will be boosted by a shift in demand in the notebook, desktop monitor and television markets to larger-sized displays, which command higher average selling prices (ASPs), iSuppli/Stanford Resources predicts. Furthermore, sales will be supported by the increased use of color TFT LCDs in cell phones, a phenomenon spurred by the proliferation of digital-camera equipped handsets, which require higher-performance displays.

A significant portion of the growth in LCD revenue is coming from active matrix (AMLCD) technology. Although monitors and notebook displays still dominate AMLCD demand, televisions and cell phones are playing more important roles in future growth. AMLCD revenue from the color TFT cell phone display market will grow more than 50 per cent from 2002 to 2003, iSuppli/Stanford Resources predicts.

Falling prices for large-sized LCD TVs continue to boost their popularity. The global market for LCD TV panels will more than double in 2003, rising to more than 3.4 million units by the end of the year. Sales will soar to 29 million units by 2007.

LCD TVs have created a niche market for themselves, with their capability to fit into spaces where conventional CRTs are too bulky to use. However, LCD TVs increasingly will serve as a replacement for CRT technology in the future and will claim a larger share of the 164-million-unit television market, iSuppli/Stanford Resources predicts.

For now, the LCD TV market remains small, with those products and cell phones accounting for only 5-10 per cent of total AMLCD revenue.

Industrial/financial applications, handheld games and HTPS (high-temperature poly-silicon) LCD panels used for projection applications each claim 3-4 per cent of total AMLCD revenue. Digital cameras, camcorders and auto-navigation/entertainment applications each contribute 2.5-3 per cent of total AMLCD revenue.

In 2003, more than 67 per cent of the AMLCD revenue will come from monitor and notebook applications, which underscores their importance to second-half growth.

Although notebook displays and monitors experienced strong first-half growth, LCD monitor panel unit sales increased only 4 per cent sequentially in the second quarter of 2003. Monitor suppliers reported strong April sales but weaker May and June sales. Some inventory is starting to build up in the distribution channel.

TFT LCD suppliers in July have begun to reduce 17-inch panel prices, and supply is easing up for most notebook and monitor displays.