As smart mobile devices prevail and impact the market demand for traditional PCs, monitor product sales remain weak as well. WitView, a research division of TrendForce, indicates that despite significant improvements in monitor products in terms of: energy efficiency, thin and light looks, and adoption of LED backlighting, the lack of apparent development in terms of new functions and special applications, coupled with global economic downturn that leads to limited consumer budgets, monitor products tend to be overlooked. Therefore, downstream brand vendors have started to transform their business strategies from expanding the market aggressively to gaining profits conservatively; meanwhile, they have set out to reduce less-profitable products while overtaking strict inventory control, resulting in a continuous decrease in monitor brand shipments.
As both monitor panel demand and its profitability are less aggressive compared to remaining products, while Taiwan panel makers make selective producing strategies, Korean panel makers therefore begin to adjust their product ratio in generation lines above Gen7. WitView research manager, Jeffy Chen, notes that 39” and 50” TV panels developed by Taiwan panel makers offer better profitability that leads to direct decrease in the production of 32”, 40”, 42”, and 46” products, making them unlikely to fulfill the panel demand from TV brand vendors. As LGD (LG Display) and Samsung Display are not only both iPad panel suppliers, but also need to support their own TV brands to make up the insufficient TV panel supply, they have sharply reduced their production size in monitor panel since 2Q12 and transferred their capacity to tablet PCs and TV panel products in response to stronger demand from the market.
Jeffy Chen further points out that Samsung was capable of shipping monitor panels of 3 million units monthly; however, its monthly monitor shipments are projected to slide, between 2 to 2.3 million units after its adjustment in its production strategy. Due to the significantly increased demand for 9.7” and 42” panels, LGD reduced its production of 19”, 22”, and 23” monitor panels that share the same generation line with 9.7” and 42” panels. Furthermore, LGD has also transferred its aim of monitor panel production to products installed with AH-IPS to escalate its overall profits.
WitView estimates that Samsung’s monitor shipments in 2012 are expected to reach 26 million units with Korean panel makers’ continuous development based on the current path. The shipments of LGD are estimated to be lowered from 56 million units forecasted in early 2012 to 52 million units, while a further downtrend is possible depending on the future market outlook.
Amid world economic turmoil, panel makers have started to explore long-term product strategies to stabilize their profits. WitView concludes that the overall market supply and demand is undergoing adjustments owing to the shrinking monitor supply from Korean panel makers. Thus, the prospective monitor panel price in the quarters to come will stay steady compared to other application products due to this panel supply decrease.