The uptick in October fab loading rates mainly came from Korean panel makers, who increased loading to 84-85%, aiming to fulfill demand in October (the peak month in the year). The increase mainly stemmed from TV panel production to meet increased LCD TV orders for Q4’11, especially for Samsung. In addition, both LG Display and Samsung are increasing shipments to Chinese customers, with consecutive monthly shipment growth in November and December.
Taiwanese panel makers also raised their fab loading rates in October, but are only at a 65% loading rate on average and plan to operate at the same level in Q4, reflecting the cautious outlook of their TV customers and a prioritization of finances over market share. Japanese panel makers are still struggling with inventory issues and have made further cuts in fab utilization for Q4’11.
Loading rates differ by fab generation, with Gen7/7.5 increasing to 86% in October, up from a record low of 76% in September, and Gen8/8.5 increasing from 64% to 72%.
Large-area panel shipments, particularly for LCD TVs, are likely to show a peak in October and decline by 2% M/M in November before scaling down significantly at the end of the year.
The planned increases in panel shipments in October were encouraged by healthy sell-through results during the Golden Week holidays in China. There were hopes that TV sales in China would surge before the China home appliance subsidy program ended in late November, and that inventory rebuilding may be stronger than after Golden Week last year.
According to Deborah Yang, Research Director of DisplaySearch, “There is a risk of oversupply as loading rates are based on panel makers’ sales targets and on optimistic expectations rather than on a realistic demand forecast.” Yang added, “A decline in large-area panel shipments is forecast for December 2011 and January 2012, as the holiday demand will already have been met.”
The DisplaySearch MarketWise-LCD Industry Dynamics report delivers concise, relevant information for decision-makers who need to quickly understand the entire large-area TFT LCD supply chain. Presented in a dashboard format, this report highlights the status of every aspect of the supply chain, from components to the end-market, covering the ever-changing dynamics of panels, brands, capacity, production, prices and more. [November 11, 2011]
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