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60-inch+ TV panels expected to exceed 5% of Displays market in 2017

15 July 2016 David Hsieh

According to the latest IHS Markit Display Long-Term Demand Forecast Tracker, TV panels 60 inches and larger are expected to reach 4.6% of the market in 2016. There is a trend toward larger-sized TV panels, and this segment may exceed 5% of the market in 2017 and 6% in 2020.

In 2016, LCD TV display panel makers are aggressively supplying 60-inch and larger LCD TV panels to fill capacity of the less profitable 55-inch and below panels. Panel makers shipped 5.2 million 65-inch panels in 2015, a significant increase of 44% year-over-year. With a stable supply from six panel makers, shipments of 65-inch panels are estimated to reach a historic high of 6.58 million this year-an increase of 30% year-over-year. Another potentially successful LCD TV size could be 75 inches, and there are three suppliers that produce panels of this size. Panel makers shipped 490,000 75-inch panels in 2015, for a sharp increase of 90% year-over-year. And 75-inch panel shipments are expected to grow around 20% year-over-year each year through 2020. Sixty-five-inch and seventy-five-inch panels will play an increasingly important role in the LCD TV segment.

65 inches may be the next mainstream panel size

After the 55-inch, the 65-inch LCD TV panel has great potential to become the next mainstream size due to the number of makers supplying 65-inch panels. The top five TV panel suppliers (AUO, BOE, Innolux, LG Display and Samsung) produce 65-inch panels, and CEC joined them this May. In the third quarter, 65-inch panel shipments will increase 30% quarter-over-quarter due to expansion planned by Innolux and Samsung.

Innolux produces its 65-inch TV panel at its Gen 6 fab. Its allocation at the fab is very tight, with both 65-inch TV and IT panels being produced in parallel. This month, Innolux plans to increase production of 65-inch TV panels at its T2 fab to 50% of capacity. Innolux wants to reach a monthly shipment target of 200,000 units by the second half of 2016. Samsung produces 65-inch panels alongside 32-inch panels using MMG at its Gen 8 fab. To further support Samsung Electronics, Samsung plans to ship 300,000 units monthly during the third quarter.

LG Display plans to reallocate capacity from 60 inches to 65 inches in 2017. The 60-inch panel has a limited number of suppliers for a small market, so LG Display plans to focus more on the 65 inch, increasing 65-inch MMG capacity so that it can ship 300,000 units monthly in the third quarter of 2016. Therefore, not only will Innolux's and Samsung's shipments of 65-inch panels grow in 2016, but shipments from LG Display and Chinese panel suppliers will also be higher.

75-inch share may increase thanks to Gen 7 production

Gen 7 fabs are occupied producing 40-inch, 43-inch, and 50-inch panels. However, TV panel makers are preparing to produce more 75-inch panels in the second half of this year due to the trend toward super large TVs, which offer better margins and quickly digest capacity.

Innolux has been suffering from price erosion on 50-inch panels in the second quarter and plans to increase output of 75-inch panels from its Gen 7 fab to 20,000 per month in the third quarter. LG Display and Samsung are maintaining their plans to ship 20,000 and 30,000, respectively, from Gen 7 each month. LG Display is evaluating producing 75-inch and 49-inch panels using multi-model glass (MMG) at its Gen 8 fab. This would add to the quantity of 75-inch panels available next year. Samsung will shut down its L7-1 fab in December. Therefore, growth for
75-inch panels may come mainly from Innolux and LG Display.

David Hsieh is Director of Analysis & Research within the IHS Technology group
Posted on 15 July 2016



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