The Roller Coaster Ride Continues in LCD Panel and Equipment Sales

Falling panel prices, low fab utilization, and continued worldwide economic concerns will cause fab expansions to be delayed, driving down forecast 2009 spending by 21%.

Although LCD manufacturers have announced capex reductions of about 50% for 2009 in response to the global economic crisis, capex is a moving target subject to change throughout the year. For example, in anticipation of a banner year in 2008, initial capex forecasts made in early 2008 called for an 86% increase. In fact, capex ended up growing only 13%.

We forecast array processing equipment to decrease 21% in 2009 following an increase of 28% in 2008. The equipment market will grow 28% in 2010, 31% in 2011, and 17% in 2012.

Large-size TFT-LCD panel growth in 2009 will be buoyed by LCD TV and notebook sales.

Shipments (Millions of Pieces)
	2007	2008
Samsung (SSNLF.PK)	20.3%	21.6%
LG.Display (LGERF.PK)	20.3%	21.5%
AU Optronics (AUO)	20.5%	18.1%
CMO	12.7%	14.3%
Sharp (SHCAY.PK)	3.4%	4.4%
CPT	7.1%	5.8%
HannStar	4.3%	3.8%
Innolux	2.7%	2.1%
BOE-OT	2.6%	2.1%
Others	6.2%	6.2%

For 2009, 124 million panels will be sold for LCD TVs, up 22% from 102 million in 2008. Panels for notebooks will grow less, up 8% to 151 million panels. Panels for monitors will decrease 4% in 2009 to 178 million units.

Panel makers are stringently controlling costs while improving the technology innovation at this time. While unit shipments of large-size panels will increase 6% to 439 million panels, panel revenues will decrease 8%.