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Three Applications Drive Demand for Flat Panel Displays
The importance of the desktop monitor market in the LCD value chain cannot be understated. “The causal relationship between the LCD flat panel desktop monitor market and other applications that use large-area displays like notebook PCs and TVs may not be immediately apparent,” says Chris Connery, Vice President of PC and Large Format Commercial Displays for DisplaySearch, “but all are indeed interrelated.”
Revenues generated from these top three flat panel display markets (LCD TVs, monitors and notebook PC displays) generated 67% of the $107B display sale revenues in 2007. LCD monitors are #2 with revenues of $24B-and actually #1 in unit volumes with more desktop monitors sold in 2007 than either LCD TVs or notebook PCs.
“A downturn in demand in one application can cause a ripple effect into pricing and supply in other applications,” notes Connery.
Growth of Display Technologies
DisplaySearch’s in-depth analysis of longer term trends indicates that the desktop monitor market is poised for growth throughout the forecast period. With complete forecasting by quarter available through 2015, forecasting by major desktop display technologies shows that LCD monitors will dominate. CRT monitor shipments, still available as an entry-level display technology in emerging markets, will continue to shrink throughout the forecast period. The all-in-one LCD PC category is forecast to rise slightly.
Of the three major trends driving desktop monitor growth, organic growth in emerging markets such as China, Latin America and Asia Pacific is the most noteworthy. Green IT initiatives and transitions in monitor sizes and resolutions are also important. These updated forecast projections were made available to subscribers in the DisplaySearch Q2’08 Quarterly Desktop Monitor Shipment and Forecast Report.
Flat Panel Monitor Growth by Region
China, with forecasted Y/Y double digit percentage growth rates (as shown in Table 2 below) and a CAGR of 13% from 2008 to 2011, will over-take the North American market (with only a 2% CAGR in the same period) to become the world’s second largest market for desktop flat panel LCD monitors by 2011. The EMEA region will remain the world’s largest market for such products with North America dropping from #2 to #3.
Growth from Commercial and Consumer Markets
Unlike other display applications, the desktop monitor market is not purely driven by consumers. Most purchases were institutional (or commercial) purchases at the beginning of 2008. While growth is expected in both the Commercial (aka B2B sector) and the Consumer (generally referred to as the B2C market) sectors a healthy balance between the two markets helps to insulate the monitor market from dynamics like the weak US economy.
Shifting Production
The dynamics of the relationship between production and demand for all large-area LCD applications is even more intertwined in the current market, as many manufacturers shift production for LCD monitors from smaller Gen 5 fabs up to Gen 6 and larger facilities. These Gen 6+ fabs where originally created and optimized for LCD TV applications, and thus along with a transition to a larger motherglass comes a shift in resolution and aspect ratio. The larger TV motherglass sizes were optimized around wide-type displays, while smaller Gen fabs were based around more conventional sizes. A further complication of this transition upward in size is that the new crop of wide displays are also more optimized around a TV wide aspect ratio, 16:9 vs. the PC wide aspect ratios, which have been 16:10.
"While such quick market transitions are difficult in more mature markets with heavy commercial IT infrastructures such as the US and Western Europe", notes Connery, these same challenges simply do not exist for first-time buyers in emerging markets. This holds true for both Commercial sectors (many just now embracing computing technologies) as well as Consumer sectors, thus helping to further drive demand in these regions as opposed to furthering demand in more mature regions, which are now slower to change standards and adopt new technologies.
DisplaySearch’s Quarterly Desktop Monitor Shipment and Forecast Report includes shipment and forecast data for LCD monitors, CRT monitors, LCD PCs and TFT LCD monitor modules, as well as cost forecasts of TFT LCD monitor modules, LCD monitor interface electronics and LCD monitors. The report is delivered in PowerPoint and includes Excel pivot tables. [July 9, 2008]
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