As 2012 comes to an end, the LCD TV panel market continues to be tight due to new process technologies, capacity conversions, a strong Chinese market, and average size growth. New sizes like 39”, 50”, 58”, 60”, and 65” were successful in 2012, and some sizes are becoming mainstream with wide adoption and volume growth.
Looking toward 2013, established sizes (e.g. 26”, 32”, 37”, 40”/42”, 46”/47”, and 55”) will give way to new sizes as the TV brands adjust their product mix. In the latest NPD DisplaySearch Quarterly LCD TV Value Chain Report, we compared the 2013 panel product mix of all panel suppliers to the LCD TV size mix in the Quarterly Global TV Shipment & Forecast Report. As the figure below shows, we found that there are great differences between the panel suppliers and buyers.
2013 Plans for LCD TV Set and Panel Size Mix
Source: NPD DisplaySearch Quarterly LCD TV Value Chain Report
Panel makers want to maximize the efficiency of each fab generation, while the TV brands want to maximize market share and revenue. As a result, their goals do not match perfectly all the time. And now, as panel makers aggressively expand into new sizes, the mismatch is growing more serious. When the market is tight, the push from panel makers is usually stronger than the pull from LCD TV brands. Many LCD TV brands will have to adjust their product mixes accordingly.
There are numerous factors affecting the size mismatch:
- To pursue the highest capacity utilization and value, panel makers have been moving faster to larger sizes than LCD TV brands, especially for 46”, 47”, 50”, 55”, 58”, 60”, and above.
- The very low priced 60” has changed the ecosystem. Some Chinese TV brands introduced 58” to compete with 60”. Samsung and LG Display are producing more 60” to compete with Sharp and Vizio. Since Gen 8 is not optimized for 60”, panel makers are using “multi-model glass” in which they make 60” and 32” panels on the same substrate.
- Almost all panel makers in Taiwan, Japan, and Korea are planning to reduce their 32” production in 2013. The tightness of 32” gives Chinese panel makers a great opportunity to obtain design wins with international brands.
- To prepare for the possible replacement of 46”/47” with 50”, most TV brands that are selling 46”/47” are using 50” panels. These include Panasonic, Philips, Samsung, Sony, Toshiba, Vizio, LG Electronics, and Chinese brands.
- The lack of Gen 7, especially in China, is creating a shortage of 40”/42”. Panel makers like AUO, LG Display, and Chimei Innolux are planning to produce more 42” in Gen 8.
- Many TV brands are adjusting their product mix for 2013. Samsung’s strong dominance enables it to add every new size to its product line. Toshiba recently shifted from current mainstream sizes like 40”, 46”, and 55” to new sizes like 39”, 50”, and 58”. Sony is considering 42” and 39” to avoid concentrating too much on 40”. TV brands in China are coping with a complicated Chinese TV market since Chinese consumers tend to go for new products.