1 February 2010


LCD-TV panel market returns, boosted by LED backlights

After three consecutive quarters of losses, the global market for LCD-TV panels returned to profitability in second-half 2009, paving the way for a resumption of revenue growth in 2010, according to market research firm iSuppli Corp.

Following a 5.2% decline from 2008 to $35.2bn in 2009, revenue from shipments of large-sized LCD panels used in TVs is set to rise 40% to $49.2bn in 2010, spurring a resumption of profitability for the LCD-TV panel market.

Overall, the industry bounced back to a profit margin of 10% in third-quarter 2009 after successive quarters of negative performance. Suppliers had their first setback in third-quarter 2008 when sales of 32-inch panels (the most popular LCD-TV size) yielded zero profitability. This was followed by a loss of 23% in Q4/2008, and then negative margins of 31% and 12%, respectively, in Q1 and Q2/2009. That tide of decline has now reversed, and profitability for 32-inch LCD-TV panels is expected to continue to rise throughout 2010, reaching 25% in Q4/2010r.

“Revenue growth and profitability in the global LCD-TV panel market in 2010 will be driven by rising demand, the shift to larger-sized displays, the accelerating sales of higher-value panels, and increased manufacturing efficiency,” says Sweta Dash, iSuppli’s senior director, LCD Research. “These higher-value panels sport features including LED backlighting, full high-definition resolution and faster refresh rates of 120Hz and 240Hz.” Furthermore, TV brands in 2010 are planning to focus on 3D solutions that will lead to faster adoption of higher-frequency panels such as 240Hz, Dash continues. “On the supply side, increased production efficiency from 8.5 and higher-generation fabs are also going to make larger-size TVs more affordable for the consumers. Furthermore, suppliers are set to cut costs by reducing the number of components used in TV panels, further bolstering profit margins.”

After a rocky start, sales of panels using LED backlights are now rising and helping to drive improved profitability for the large-sized LCD panel business. In the early phase of adoption of LED-backlit LCDs in first-quarter 2009, suppliers sold these panels at prices below their manufacturing costs because of the general oversupply in the market, says iSuppli. While this helped drive adoption of LED-backlighting technology, it also exacerbated losses among suppliers. However, higher demand combined with supply constraints will lead to panel price increases and improved revenue growth opportunities for panel suppliers, forecasts the firm.

Global shipments of LCD-TV panels using LED backlights are set to rise to 25.4 million units in 2010, up by more than a factor of five from 4.8 million in 2009. By fourth-quarter 2010, 25% of shipped LCD-TV panels are expected to have LED backlights, iSuppli forecasts.

See related items:

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Search: LCD-TV panels LED backlighting LEDs