According to the DisplaySearch, global TFT LCD glass input peaked in second-quarter 2011, achieving a record 42.1 million square meters, but then fell to 36.5 million square meters in third-quarter 2011, and is expected to reach 37.8 million square meters in fourth-quarter 2011.
In first-quarter 2012, panel makers are expecting to increase glass input by 5%, to 39.8 million square meters. The forecast capacity utilization is 77% in first-quarter 2012, which is 7% higher than previously expected. This is partly based on expectations that prices have bottomed out in this cycle. Also, panel makers are planning for new models, such as larger size multi-function monitor panels, ultra-slim notebook PC panels, new TV panel sizes including 39-, 43-, 48- and 50-inch with cost effective CCFL and LED backlights, and slim bezels. However, with 2012 market demand still unclear, panel makers foresee the possibility of adjusting capacity utilization again in first-quarter 2012.
According to Shawn Lee, senior analyst for DisplaySearch, "Increasing production does not necessarily increase shipments, as panel prices are close to cash costs in many cases. However, improved inventory and price outlooks, as well as the launch of new panel models, are leading panel makers to be more optimistic." Lee added, "Other factors leading to the increased production forecast include the need to increase utilization rates in order to cover depreciation costs, and the fact that new panel producers in China are starting to ramp up their fabs, contributing to the increased input. Lee concluded, "After a long oversupply period, panel makers are still cautious about glass input and utilization rates, and they do not plan to increase utilization to more than 80% in first-quarter 2012."
Tablet Panel Production on the Rise, While Mini-Notes Slide
In mobile PC applications, panel makers plan to decrease production of netbook panels while increasing production of tablet PC panels, with area production of tablet PC panels expected to double from first- to second-quarter 2011. Panel makers are also reshaping their tablet PC panel production strategies, with Sharp using its 8G fab to produce tablet PC panels with oxide TFT backplanes, and Samsung, LG Display, and Sharp producing tablet PC panels with more than 200 pixels per inch.
Other panel makers, including AU Optronics (AUO), Chimei Innolux (CMI), BOE, Chunghwa Picture Tubes (CPT) and HannStar Display, are planning to apply more production resources to tablet PC panels in 2012. Although 5G and smaller fabs will mainly produce netbook and tablet PC panels, more than half of these will be produced in 6G and 8G starting in first-quarter 2012.